Ether has broken the uptrend channel that began on July 20. Now, it is trading below its 21 simple moving average, located around 3.188, and below the support of 6/8 Murray.
This move could indicate a trend reversal or a correction for a longer period towards the level of 4/8 Murray and the 200 EMA.
On the 4H chart, we can see that the price made a break of the uptrend channel on August 17. Now, it is trading at the 21 SMA is above the current price. This is a negative signal for ether and there could be a fall to the 2,500 level in the short term.
On the other hand, the London hard fork of ethereum, which was successfully integrated, gave a strong boost to ethereum to 3,275. This network included the improvement proposal EIP-1559, designed to simplify the way transaction fees are paid using a burn mechanism, removing some ETH from circulation.
The reduction of new currencies, as well as a burning mechanism that reduces the supply, could give more strength to ether. In the medium term, it could reach the level of 4,000, and up to 5,000.
Market sentiment is optimistic for ether. Some analysts and large investors believe that ether can surpass BTC, also some large companies are integrating ether in their transactions. This is a very strong signal that ETH could arrive up to 10,000 by the end of the year.
According to the chart, the current outlook is negative because since August 7 the volume and volatility of ether have fallen. This would be a correction signal. Therefore, we believe that selling below $3,125 will be a good opportunity with targets in the area where the 200 EMA and the 4/8 murray line converge around $2,500.
Support and Resistance Levels for August 18 - 19, 2021
Resistance (3) 3,399
Resistance (2) 3,231
Resistance (1) 3,156
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Support (1) 2,839
Support (2) 2,717
Support (3) 2,545
