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Is Ethereum (ETH) Forming Double Top Pattern?

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Wed, 10/07/2024 - 12:37
Is Ethereum (ETH) Forming Double Top Pattern?
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If you take a closer look, you might notice a double top pattern, but a reverse one. The reverse double top is actually bullish for the asset and hints at an upcoming price reversal.

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Traditionally speaking, the double top pattern is a bearish signal that denotes a change in trend from an upward to a downward one. But it can also indicate the opposite when it is reversed. It appears that a bullish reversal may be approaching, as this reversed double top pattern is forming on Ethereum's four-hour chart.

According to this pattern, ETH has encountered resistance at this point but has not declined noticeably, maintaining its bullish outlook. If buyers continue to build strength, there may be a breakout above the resistance level, as indicated by the second peak forming higher than the first. 

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ETH/USD Chart by TradingView

A reverse double top pattern may be a sign that bullish sentiment is replacing bearish sentiment on the market. This is how to do it:

Enhanced purchasing pressure is indicated by the double top itself and the formation of higher lows. Investors and traders may be looking to buy now in anticipation of a breakout.

Support levels: The price is still firmly positioned at $3,080 and has not dropped below important support levels. This consistency frequently comes before a bullish move.

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It is important to pay attention to the trading volume during the pattern's formation. The strength of the bullish reversal is confirmed if the volume rises in tandem with the price.

In light of the present setup, ETH might see a sharp rise in price if it breaks above the $3,130 resistance level. If this threshold exceeds $3,200, then $3,300 might be the next target. However traders should also be cautious of false breakouts.

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