Ethereum prices pulled back on September 6 after days of encouraging higher highs in the first week of September.
Technically, ETH prices are bullish in the short term but under pressure from a top-down approach considering the underwhelming performance of the last few months.
ETH bulls have notably failed to reverse the losses of August 26. Therefore, from an effort versus result perspective, bulls have an arduous task ahead.
For buy trend continuation, ETH bulls must first reverse losses of September 6, align with gains of August 29 and push higher above the 20-day moving average, ideally with rising trading volumes.
$21 billion of ETH Locked ahead of the Merge
Already, there are fundamental triggers that may see ETH prices recover in the days ahead. Specifically, traders are watching out for events around the Ethereum Merge scheduled for September 15, 2022.
If successful, Ethereum would transit to a staking system, eliminating miners for validators. According to statistics, there is $21.2 billion of ETH locked in the official Eth2 deposit contract by various validators keen on helping the network decentralize and be robust as the proof-of-work blockchain.
To address technicalities and concerns around Ethereum 2.0 and whether the network would remain as secure and reliable as before while concurrently being energy efficient, Vitalik Buterin has said he will publish a book titled Proof of Stake on September 27. According to the co-founder, his text shall “compile various writings made over the last ten years.”
"Proof of Stake", the (physical and digital) book compiling various writings I've made over the last ~10 years, will be out in a month!
You can get a signed digital copy and NFT here: https://t.co/RCZPHs9rpe
My share of the proceeds all goes to @gitcoin grants public goods!
— vitalik.eth (@VitalikButerin) August 31, 2022
Ethereum Price Analysis
Fundamental factors could support ETH prices in the near term, despite sharp losses on September 6. Even though buyers appear to have the upper hand in the short term, building on the bullish engulfing bar of August 29, sellers are in control from a top-down preview. It is especially the case now that buyers failed to break above the middle BB and reverse the losses of August 26.
The immediate resistance level is at $1.7k while support is at $1.4k—or August 2022 lows. Based on the current formation, buyers have a slim chance above $1.4k. As such, bullish traders may load on dips as long as prices are above August lows, defying the losses of September 6.
However, any break below this $1.4k, wiping out gains of August 29, will invalidate all bullish calls, paving the way for even more losses towards $1.1k.
Technical charts courtesy of Trading View
Disclaimer: Opinions expressed are not investment advice. Do your research.
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