Ethereum [ETH] Price Correction: Cautious Investors Eye Bullish Breakout

• Ethereum [ETH] was in a short-term price correction, as evidence by a descending triangle pattern and a flagpole that could be deemed an overall bullish pennant pattern.
• Technical indicators such as the On Balance Volume (OBV), Relative Strength Index (RSI), and the Chaikin Money Flow (CMF) showed that buyers had the upper hand but not outstanding leverage to keep sellers in check.
• A patterned breakout to the upside and associated gains were unlikely, but a convincing patterned breakout on the upside would invalidate the bias and aim at the $1,265.49 target.

Ethereum [ETH] has been in a short-term price correction recently, as evidenced by a descending triangle pattern and a flagpole that could be deemed an overall bullish pennant pattern. The price action for the past few hours indicated that ETH was ready for a breakout, with investors seeking a target of $1,300. However, Bitcoin’s [BTC] attempt to break the $17K resistance on 4 January hit a roadblock, pushing ETH back to the $1,270 mark. Since then, investors have been cautious, as technical indicators have not indicated any bullish momentum in the next few hours.

The On Balance Volume (OBV) showed that buying pressure was limited, as it had dipped. The Relative Strength Index (RSI) had also retreated gradually from the overbought zone and was near the midpoint, indicating that buying pressure had eased. The Chaikin Money Flow (CMF) crossed above the zero mark, indicating buyers had the upper hand, but it was moving sideways and remained close to the neutral level. This showed that sellers could push ETH lower to retest $1,247 support or the 26-period EMA of $1,246.39.

Therefore, a patterned breakout to the upside and associated gains were unlikely, but a convincing patterned breakout on the upside would invalidate the bias. Such an upswing would aim at the $1,265.49 target, but bulls would need to break out of the resistance at $1,274.83 first. On the downside, a bearish BTC could push ETH even lower to a patterned breakout at the bearish target of $1,234.15. Investors should be cautious and monitor the overall market movement before making any decisions.