Less than two days before Ethereum’s blockchain merge from a proof-of-work (PoW) to a proof-of-stake (PoS) blockchain, people are wondering about ETH price action. The merge provides a more scalable project, increases the blockchain’s security, makes it less energy-intensive, and reduces hardware requirements.
This seems to be a good thing for Ethereum, DeFi, and the crypto environment. But Ethereum’s price is right now around $1,500 after an 8% daily red candle in a day with high selling pressure in all markets. After the unpleasant CPI reports, Bitcoin is down 9%, and the S&P 500 is also down more than 4% for the worst day since June 2020.
With the merge occurring in 1 day, Ethereum’s price is on everybody’s watchlist. Let’s check out the chart structure and see what Ethereum’s price doing.
ETH price structure
First, as always, you have to recognize the trend to define the structure the price is following. Since the November 2021 top at around $4,800, Ethereum has been following a downtrend with well-defined higher and lower lows.
After a failed reversed trend structure, confirming the downtrend, took place between January and May this year, the price continued falling aggressively due to an economic recession, the war in Ukraine, and high inflation. Finally, the price stopped at a key demand zone around $1000, closing below this price for just a few hours on June 18th. The price continued ranging between $1,000 and $1,200 for a few weeks until it gained enough liquidity to target an important supply zone.
The price respected a big supply zone around $2000 after a massive buying pressure from mid-July to mid-August. And ever since then, the price has been ranging between $1,420 and $1,790, a new level to watch these days.
Why is $1,790 a key supply level?
That price is not just a psychological level, it acted as a key demand zone between May and July 2021. And now is acting as a supply level as the price clearly rejected the zone since yesterday.
After defining important levels of supply and demand, you can start looking for a possible zone for the price to go. And that way you can define your invalidation and confirmation prices in order to define the price direction. It is clear that we have two major liquidity zones in $1,000 (demand) and $2,000 (supply), and they are the most important levels to watch in order to know what will happen with the primary trend.
Price behavior
Ethereum’s price is in the middle of the two major zones outlined before at around $1,500. That’s why you should also define a middle range zone, in this case, it’s clearly defined between $1,400 and $1,790.
If the price continues to go down, the first demand level to test should be that $1,400 zone, after the price reacts to that zone you should wait for a violation and continuation of the downtrend, if it reacts the other way you should focus on the next supply zone. But if Ethereum’s price breaks down that support, the next demand zone would be around $1,000, making a great case for sellers.
On the other hand, the price could go up and break the $1,790 supply level to give buyers momentum and try to push the price towards the major supply zone around $2,000. Making a great bull case after the merge and changing the trend.
Identifying the key levels can be important in order to realize if the secondary trend is continuing or changing its direction in relation to the primary trend. That way it’s easier to identify major opportunities to learn and understand this market.
Disclaimer
The content of this article or post is Not Financial Advice. All the information is only meant for educational purposes. I am not affiliated with any of the websites, crypto projects, or coins mentioned in this article or post.
New to trading? Try crypto trading bots or copy trading
