The cryptocurrency market has been experiencing increased selling pressure, which could be linked to the release of the Personal Consumption Expenditures (PCE) index. The higher-than-expected value of the PCE index triggered a correction phase in most major coins, including Ethereum (ETH). The Ethereum price turned down from $1720 and initiated a new bear cycle within a megaphone pattern, hinting at increased volatility and uncertainty.
Megaphone Formation and Downside Risk
The megaphone pattern is formed by two diverging trendlines and a series of higher highs and lower lows. The ongoing bear cycle with the megaphone pattern puts the Ethereum price at an 8-9% potential downfall to a lower support trendline. The Ethereum coin daily time frame chart displays a brief phase of consolidation despite a series of higher high formations.
Potential Entry Points and Intraday Trading Volume
Short-term buyers can find entry spots at the $1500 and declining trendline levels. At press time, the Ethereum price is at $1600 with an intraday fall of 0.43% and minimum price movement. The intraday trading volume in Ether is $8.28 billion, indicating a 7.5% gain. Traders can expect an increase in volume by the end of the day, resulting in a rapid movement leading the price closer to the support level of $1500.
Read More: Ethereum Price Prediction 2023: Deflationary Trends Fuel Bullish Sentiment
Technical Indicators and Support Levels
The daily RSI slope is declining with the correction phase, but the diverging rate increases the possibility of a bullish divergence as it reaches the $1500 support level. The daily 200 and 50-day EMAs are giving a golden crossover, but the growing uncertainty reflected by the technical pattern warns investors to wait until the correction phase bottoms out. The resistance levels for Ethereum price are $1680 and $1788, while the support levels are $1500 and $1420.
In conclusion, the megaphone pattern in the daily chart puts the Ethereum price at an 8% downside risk. Traders can find potential entry points at the $1500 and declining trendline levels, while investors are advised to wait until the correction phase bottoms out before making any significant moves.