Ethereum at risk of falling below $3,200 as ETH price faces massive resistance

Ethereum’s native token, ETH, is at risk of falling below $3,200 in the coming sessions as its upside encounters a strong resistance zone.

Specifically, the price of ETH is up nearly 22% so far this month, as prices rise across the market. In the first eight days of October, the second-largest cryptocurrency by market capitalization rose from below $3,000 to above $3,650, sparking more bullish forecasts.

Crypto Cactus, a Twitter technical chart expert, pointed out: "$6,000 will come soon; $10,000 is in preparation." David Gokhshtein, CEO of the distributed data network PAC Protocol, also predicts ETH's upward target of $10,000.

Wait for ETH to breach $10,000 so the party can really begin.

BTW: The only thing I'm wondering is, how will the NFT market react?

— David Gokhshtein (@davidgokhshtein) October 8, 2021

But ETH’s price is likely to enter a confluence of three clearly bearish indicators, which could limit its upside move and trim some of its recent gains.

Two resistance zones and a rising wedge

Three bearish indicators could prompt ETH to undergo a bearish reversal, namely a rising wedge, a descending trendline resistance, and an intermediate-term resistance band, as shown in the chart below.

ETH/USD 4-hour price chart shows bearish confluence Source: TradingView.com

As ETH rallied, a rising wedge formed and left behind a string of higher highs and lower lows. Meanwhile, Ethereum’s uptrend has occurred amid declining trading volumes, indicating a lack of bullish confidence among traders.

Furthermore, the apex of the structure - the meeting point of its two trendlines - lies near two historical resistance zones. The first is the mid-term resistance band, as shown in the chart above, before it showed a top for ETH above $3650.

Meanwhile, the second level of resistance is the descending trend line, seen more clearly on the daily chart below, around $3,800.

ETH/USD daily price chart showing descending trendline resistance Source: TradingView.com

Therefore, the apex of the rising wedge and the two resistance trendlines pose a risk of a bearish reversal for Ethereum. If this happens, ETH will plummet, falling to the maximum height between the wedge's upper and lower trendlines.

That puts it below $3,200, an accumulation range for ethereum traders in the first half of September 2021.

Activating a reversed head and shoulders pattern?

A drop to or below $3,200 will not necessarily push ETH into a full-blown bearish cycle. Instead, it could trigger a bullish inverted head and shoulders pattern.

ETH/USD 4-hour price chart shows potential inverted head and shoulders pattern Source: TradingView.com

If the pattern plays out as expected, traders’ accumulation of ETH tokens will increase around $3,200, leading to a bounce from the neckline area in the upward chart. In doing so, ETH price will place its inverted head and shoulders target at a length equal to the maximum distance between the neckline and the bottom of the pattern.

This would bring the ETH price to an all-time high of around $4,500.

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