After painting a “double Doji” pattern with a few bullish technical indicators, Ethereum’s native token Ether (ETH) looks set to experience a sharp upward retracement over the next weeks.
Dojis meet another strong support confluence
A Doji is a candlestick which forms when a financial instrument opens or closes at the same level within a given timeframe. This can be hourly, daily, weekly, or daily. Technically, a Doji is a symbol of indecision in the market. It represents a balance between bulls and bears.
Traditional analysts see a Doji as a sign that a market is moving downwards and it is slowing down selling momentum. Dojis can be seen by traders as a signal to open new long positions, or to maintain their short positions, in anticipation of a price decline.
A double Doji indicates that traders are still in bias conflict, which could lead to the price breaking out in one direction.
The ETH/USD chart shows a similar pattern, so the token is ready to make strong trend-defining moves during the next sessions.
Weekly price chart for Ethereum/USD featuring two Doji formations. Source: TradingView
Ether’s technicals favor a decisive rebound, starting with its 200-week exponential moving mean (200-day EMA, the blue wave in this chart above), which is near $1,625, and has served as a strong support level for May 2022.
Next, Ether will receive a concrete price floor in $1,500-$1,700, which helped to end the token’s bearish efforts between February 2021 and July 2021. These technical indicators, together with the double Doji, anticipate a price rebound.
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If ETH prices rebound as described above then the next bullish target would be the 0.5 Fib (near 2,120), of the Fibonacci retracement chart, which is drawn from the $85 swing low to the $4,000.00 swing high.
Weekly price chart for Ethereum/USD with Fib support and resistance targets Source: TradingView
This would be a 20% move up. A prolonged move above the 0.5 Fib level could lead traders to target the 0.382 Fib near $2,700 as their next upside goal. This is a level that coincides with ETH’s 50-week EMA (the Red Wave) by September 2022.
This would result in a price rise of nearly half a percent.
Related: Why Ethereum prices are below $2,000
If the double Doji pattern is resolved in a breakdown below support range, Ether could reach $1,400. This level corresponds to ETH’s 2018 high and was used as a support in February 2021 as shown below.
Weekly chart of the ETH/USD exchange rate. Source: TradingView
If the decisive breakeven point is below $1,400, then the next downside target is the 0.786 Fib line at $1,000.
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