Wednesday may prove to be a crucial day for financial markets, including the realm of cryptocurrencies, as President Donald Trump is anticipated to unveil a series of reciprocal tariffs aimed at “liberating” the U.S. from what he deems unfair practices by trading partners.
As the significant announcement approaches, indicators of downtrend fatigue have surfaced in the ether (ETH) market. That’s correct: after significantly underperforming BTC during the two-year crypto bull run, ETH might just take the spotlight if the upcoming tariffs are imposed more cautiously than expected.
Seller fatigue at March lows, possible double bottom
Last week, ether declined alongside bitcoin; however, sellers were unable to breach the 16-month low of $1,755 that was reached on March 11. This stands as an initial indication of seller fatigue or exhaustion of the downward trend.
Since that point, prices have recovered to $1,880, hinting at the formation of a double bottom with neckline resistance at $2,104. A breakthrough at that level would validate the bullish breakout, paving the way for $2,400, identified as the next resistance level based on measured moves.
Bullish divergence
While prices revisited the low from March 11 last week, the histogram reflecting the difference between the price and its 50-day simple moving average (SMA) did not follow, instead forming a higher low.
This divergence implies that even though prices dropped, the momentum behind the decline has weakened.
Line break flips bullish
Following an extended downtrend that saw prices cut in half down to $2,000, the three-line break chart has now turned bullish, indicating a major shift in market sentiment. This change is depicted by the presence of a green bar on the daily timeframe, hinting at potential price momentum reversal.
Although the prior bullish signal from early March was short-lived and turned out to be a bear trap, the latest bullish reversal appears more convincing, supported by indications of downtrend exhaustion observed in the aforementioned candlestick charts.
However, it is crucial to note that macroeconomic factors can dramatically influence charts, meaning widespread risk aversion stemming from Trump’s tariffs could nullify all previously mentioned bullish signals, possibly resulting in further losses for ether.