ETH’s bullish reversal candlesticks form near a strong support confluence, raising anticipations about a sharp upside retracement ahead.
Ethereum’s native token, Ether (ETH), looks poised to undergo a sharp upside retracement in the coming weeks after painting a so-called “double doji” pattern, accompanied by a few bullish technical indicators.
Ether strong support confluence meets dojis
To recap, a doji is a candlestick that forms when a financial instrument opens and closes around the same level on a specified timeframe, be it hourly, daily, or weekly. From a technical perspective, doji represents indecision in the market, meaning a balance of strength between bears and bulls.
So, if a market is trending downwards when doji appears, traditional analysts view it as a sign of slowing selling momentum. As a result, traders may look at doji as a sign to existing their short positions or open new long positions in anticipation of a price reversal.
Meanwhile, a double doji shows a continued state of bias conflict among traders, which could result in the price breaking out in either direction.
With ETH/USD forming a similar pattern on its weekly chart, the token looks ready to log strong trend-defining moves in the coming sessions.
ETH/USD weekly price chart featuring two Doji formations in a row. Source: TradingView
Some of Ether’s technicals favor a decisive rebound move, beginning with its 200-week exponential moving average (200-day EMA; the blue wave in the chart above) near $1,625, which has served as a strong support level in May 2022.
Next, Ether gets another concrete price floor in the $1,500-$1,700 range, which was instrumental in capping the token’s bearish attempts between February and July 2021. Coupled with double doji, these technical indicators anticipate a price rebound ahead.
A 50% ETH rally ahead?
If ETH price rebounds as described above, then the next bullish target is the 0.5 Fib line (near 2,120) of the Fibonacci retracement graph, drawn from the $85-swing low to the $4,300-swing high.
ETH/USD weekly price chart featuring Fib support and resistance targets. Source: TradingView
That would mark a 20% upside move. Meanwhile, an extended move above the 0.5 Fib line could have traders eye the 0.382 Fib line near $2,700 as their next upside target, a level coinciding with ETH’s 50-week EMA (the red wave), by the end of September 2022.
This would be a nearly 50% price rally.
Related: 3 reasons why Ethereum price is pinned below $2,000
Conversely, if the double doji pattern resolves in a breakdown below the support range, it could push Ether toward $1,400. This level coincides with ETH’s 2018 top and was instrumental as a support in February 2021, as shown below.
ETH/USD weekly price chart. Source: TradingView
A decisive breakdown below $1,400 then opens the door to the 0.786 Fib line near $1,000 as the next downside target.
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