The recent price movement of Ethereum on the 4-hour chart has led to the formation of a classic Head and Shoulders pattern, opening up the possibility of a deeper correction. After a relatively stable period around the $2,500 zone, Ethereum broke below the support level of the neckline as last week was about to end. This raises the question of whether the price of Ethereum will continue to fall or if the buyers still have a chance to regain momentum in the new week.
The Head & Shoulders pattern is confirmed after breaking below $2,480.
The Head and Shoulders pattern, one of the most recognizable reversal patterns in technical analysis, can now be clearly seen on the 4-hour candlestick chart of Ethereum. This chart and the technical outlook were first shared on the TradingView platform by cryptocurrency analyst MelikaTrader94. The structure consists of a left shoulder, a prominent head peaking above $2,700, and a right shoulder peaking near $2,650. The neckline, drawn around $2,480, was broken during Ethereum's recent pullback to $2,380. In turn, this has shifted the short-term outlook to bearish.
After breaking down, Ethereum has tried to reclaim lost ground and is currently retesting the neckline zone. This retest around the $2,500 level is very important, as failing to push back significantly above this level could likely confirm a bearish setup and cause the price of Ethereum to reverse downwards towards the next support zone.
According to the outlook from analyst MelikaTrader94, the price target from the breakout of this Head and Shoulders pattern before any significant recovery can occur is in the range of $2,200 to $2,250.
Bulls must reclaim $2,650 to negate the bearish setup
The convergence of supporting factors around $2,200 acts as a potential landing zone. This level not only aligns with the measured move of the Head and Shoulders pattern but also corresponds with the order block from May 9 during the bullish rally of Ethereum above $2,000 at that time. This further enhances the technical relevance of the $2,200 to $2,250 range serving as a support zone.
However, the situation is not entirely bearish. The path ahead is clearly narrow for Ethereum bulls. The first step to negate the bearish setup is to decisively reclaim the neckline around the $2,500 level. Additionally, breaking back above the right shoulder around the $2,650 level will invalidate the Head and Shoulders pattern, and another pattern is likely to emerge.
A successful bullish recovery not only invalidates the bearish pattern but could also restore sentiment for a retest of the zone $2,700 to $2,800, corresponding to the head peak in the newly formed pattern. Until such a recovery occurs, the price of Ethereum could quickly reverse down at any time.
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Head and Shoulders Pattern Analysis of Ethereum: Can the Bulls Regain Control?
The recent price movement of Ethereum on the 4-hour chart has led to the formation of a classic Head and Shoulders pattern, opening up the possibility of a deeper correction. After a relatively stable period around the $2,500 zone, Ethereum broke below the support level of the neckline as last week was about to end. This raises the question of whether the price of Ethereum will continue to fall or if the buyers still have a chance to regain momentum in the new week. The Head & Shoulders pattern is confirmed after breaking below $2,480. The Head and Shoulders pattern, one of the most recognizable reversal patterns in technical analysis, can now be clearly seen on the 4-hour candlestick chart of Ethereum. This chart and the technical outlook were first shared on the TradingView platform by cryptocurrency analyst MelikaTrader94. The structure consists of a left shoulder, a prominent head peaking above $2,700, and a right shoulder peaking near $2,650. The neckline, drawn around $2,480, was broken during Ethereum's recent pullback to $2,380. In turn, this has shifted the short-term outlook to bearish. After breaking down, Ethereum has tried to reclaim lost ground and is currently retesting the neckline zone. This retest around the $2,500 level is very important, as failing to push back significantly above this level could likely confirm a bearish setup and cause the price of Ethereum to reverse downwards towards the next support zone.
According to the outlook from analyst MelikaTrader94, the price target from the breakout of this Head and Shoulders pattern before any significant recovery can occur is in the range of $2,200 to $2,250.
Bulls must reclaim $2,650 to negate the bearish setup The convergence of supporting factors around $2,200 acts as a potential landing zone. This level not only aligns with the measured move of the Head and Shoulders pattern but also corresponds with the order block from May 9 during the bullish rally of Ethereum above $2,000 at that time. This further enhances the technical relevance of the $2,200 to $2,250 range serving as a support zone. However, the situation is not entirely bearish. The path ahead is clearly narrow for Ethereum bulls. The first step to negate the bearish setup is to decisively reclaim the neckline around the $2,500 level. Additionally, breaking back above the right shoulder around the $2,650 level will invalidate the Head and Shoulders pattern, and another pattern is likely to emerge. A successful bullish recovery not only invalidates the bearish pattern but could also restore sentiment for a retest of the zone $2,700 to $2,800, corresponding to the head peak in the newly formed pattern. Until such a recovery occurs, the price of Ethereum could quickly reverse down at any time.