Ethereum has broken below the support of $1,720-$1,700. Price has activated the head and shoulders bearish pattern with target of $1,500. Price has moved as low as $1,648 today but it is now bouncing towards the broken support which is now resistance.
Green line - support trend line broken
Yellow lines - Head and shoulders pattern
Red line - resistance
Red rectangle - neckline support
ETH/USD is bouncing towards the neckline which is now resistance. This is an important back test of the break down. A rejection at $1,700-$1,720 will open the way for a move for a new short-term low below $1,648. The head and shoulders target is at $1,500. Major resistance is at the red trend line at $1,827. As we explained in previous posts, as long as price is below this level Ethereum is vulnerable to a deep pull back.
