Wednesday could be a pivotal day for financial markets, including cryptocurrencies, as President Donald Trump is expected to announce sweeping reciprocal tariffs to ‘liberate’ the U.S. from the supposed unfair practices of its trading partners.
Ahead of the pivotal announcement, signs of downtrend exhaustion have emerged in the ether (ETH) market. Yes, you read that right: after having lagged BTC by a large margin during the two-year crypto bull run, ETH may take the lead if the looming tariffs are more measured than expected.
Seller Fatigue at March Lows: The Potential for a Double Bottom
Ether experienced a downturn alongside bitcoin last week, yet the bears failed to penetrate the 16-month low of $1,755 hit on March 11. This represents a crucial sign of seller fatigue or downtrend exhaustion.
Since then, prices have rebounded to $1,880, teasing a double bottom formation with the neckline resistance positioned at $2,104. A successful move through this point would confirm a bullish breakout, potentially opening doors to target $2,400, as identified by the measured move method.
Bullish Divergence Signals Potential Growth
While prices revisited the low from March 11 last week, the histogram representing the spread between the price and its 50-day simple moving average (SMA) did not follow suit, instead carving out a higher low.
This divergence indicates that although prices have fallen, the momentum behind the downward movement has weakened.
A Shift in Sentiment: Line Break Flips Bullish
After a prolonged downtrend resulting in prices halving to $2,000, the three-line break chart has now flipped bullish, marking a significant shift in market sentiment. This change is illustrated by the appearance of a green bar on the daily time frame, suggesting a potential reversal in price momentum.
Although the earlier bullish signal from early March turned out to be a bear trap, the latest bullish reversal appears more credible due to the accompanying signs of downtrend exhaustion on candlestick charts discussed above.
However, it is essential to consider that macro factors can single-handedly sway market trends. Broad-based risk aversion arising from Trump’s tariffs could invalidate all the bullish signals presented, potentially leading to deeper losses in ether.
