Technical outlook:
Ethereum dropped through sub $2,200 levels in the early Asian session on Tuesday before pulling back sharply. The crypto is now rising through $2,450 erasing all losses and could complete the day with an Engulfing Bullish candlestick pattern. Bulls are still looking poised to push prices through the $3,800-4,000 area going forward.
Ethereum has managed to hold its previous swing lows around $2,140-50 by just a margin, keeping the bullish structure intact. We would still maintain the fact that a corrective wave is underway since the $2,140-50 lows and it could be into its last leg higher towards $3,800-4,000. The bottom line for the above to hold is the $2,140-50 interim support though.
Ethereum is also producing a bullish divergence on the RSI which could be further support for an extended rally through $3,800. Also, note that the Fibonacci 0.18 retracement of the entire drop between $4,850 and $2,140-50 is seen around $3,850, which should provide a strong resistance if reached. The bulls might remain in control in the near term.
Trading plan:
Potential rally through $3,800 against $2,100
Good luck!
