Ethereum ready to plunge through $1600/50?

Technical Analysis:

Ethereum has raised through fresh highs at $2719 today increasing expectations for a continued rally. But charts are depicting a different story; potential bearish reversal towards $1600/50 at least. As shown on the daily chart here, please notice the bearish divergence on RSI.
As Ethereum bulls managed to print yet another all-time highs today, the RSI failed to confirm. This indicator is the most effective at the end of 5th waves. A divergence on RSI around 5th waves indicates potential trend reversal ahead.
Ethereum wave structure could be seen as a larger degree Wave ((5)) in progress since $81.50 lows in December 2018. Within the above structure, the crypto might have terminated Wave (3) at todays’ high around $2719 levels.
If the above structure holds well, Ethereum might be on its way to carve a Wave (4) lower towards $1600/50 levels in the next few trading sessions. Also note that $1650 is fibonacci 0.382 retracement of the entire rally between $89.50 and $2540 levels respectively.
Alternately, Ethereum might have completed Wave (5) at $2719 high today. In that case, a dramatic reversal can be seen to be unfolding soon. Either way, the crypto is expected to be in control of bears for a few trading sessions.
Immediate price support on the daily chart is seen around $2096 mark and a break below that confirms a meaningful top in place at $2719 levels respectively. Traders might be preparing to initiate fresh short positions against $2900 mark.

Prepared by

Finacademy Technical Team