Ethereum’s monthly chart shows price action within a potential pennant formation, testing key support levels. The next few months will be crucial in determining whether this is a bear trap or the start of a deeper decline.

Key Points:

• Dynamic Resistance: The upper boundary of the pennant is defined by the November 2021 and December 2024 highs, acting as a key resistance level.

• Support Breakdown: The lower support, tested multiple times since June 2022, is currently breaking, suggesting potential bearish pressure.

• Fibonacci Retracement: The 0.618 Fibonacci level, around $1,500 (measured from the all-time low of $119 to the all-time high of $4,850), is a critical area for a potential bottom.

• False Break or Bull Trap: A close back within the pennant would confirm a false breakdown, possibly leading to new all-time highs.

Ethereum is currently at a pivotal stage, with price breaking below long-term support. If this breakdown proves to be a false move and price reclaims key levels, it could trigger a strong reversal towards new highs. However, failure to recover could signal extended downside, making the $1,500 level a crucial area to watch.

Given the monthly timeframe, this setup will take time to develop, requiring patience from traders. The coming months will determine whether Ethereum is setting up for a major breakout or if bearish momentum continues to dominate.

Hope this analysis helps.

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