- Ethereum retraced to demand, reached a new high, and then sharply dropped
- Price could target liquidity below or rally briefly before resuming its descent
- Markets remain unpredictable—scenarios provide possibilities, not certainties
Yesterday, we observed a bullish structure on the H1 timeframe (each candlestick representing one hour).
True to the analysis, Ethereum retraced to a demand zone and then surged to create a new high. Traders who entered at the demand zone with a target of the new high potentially scored an impressive risk-reward ratio of 1:7.
Not a bad day in the markets!
But as with any good story, there’s a twist. After reaching that new high, Ethereum plummeted. So, where could it go from here?
Two Potential Scenarios
1) Further Downside for Liquidity
Ethereum may continue its descent, aiming to target the liquidity pockets discussed in yesterday’s analysis.
For those unfamiliar, liquidity refers to clusters of pending orders often left near key levels. Big players may drive the price down to sweep those orders before reversing.
2) A Short-Term Rally Before More Downside
Alternatively, the price might stage a quick rally, grabbing smaller liquidity above before resuming its downward trajectory.
In trading, nothing moves in a straight line; these “fake-outs” can trap less-experienced traders.
The Bigger Picture
Let’s be honest—we don’t have a crystal ball. Ethereum, like any asset, can behave unpredictably, defying all expectations. The scenarios we’ve discussed are possibilities based on technical observations, not guarantees.
A Word of Caution
This analysis is for informational purposes only and not financial advice. Trading requires careful risk management and thorough understanding. Always make your own informed decisions.
As always, stay sharp, stay curious, and stay in the know. Where do you think Ethereum is heading next? 👇
