Ethereum (ETH) analysis: a “doji” on the weekly chart?

Ether is currently in the middle of the range between $2000 and $1000. On the Ethereum (ETH) candlestick chart, weekly scale, we can also see a “doji” forming. This is a trend reversal candle. However, the fact that it is in the middle of a range, with very little volume leaves us perplexed. Could Ethereum (ETH) be expected to rise based on this candle? Let’s try to combine it with other indicators.

A “Doji” on the Ethereum (ETH) chart: what does it mean?

Generally, this Japanese candle shape signifies a trend reversal. This is especially valid when it is at the top of an uptrend, or at the bottom of a downtrend. In the case of Ethereum, here the Doji is in the middle of a three-month-old range. This reduces the likelihood that it is a trend changing pattern.

This candle can also signify indecision in the market. In other words, it looks like the buyers are failing to push the price up. On the other hand, the bears do not have enough strength to push the price down. This seems to be the case for Ethereum (ETH). Indeed, the price is found around the $1280 support zone. Concretely, the price of ETH stagnates around this level since, first, the bears which have been selling since $1770 are starting to close. Second, many bulls place their orders forpurchase around this area. Except that all these orders are not sufficient in terms of volumes to drive up the price. This may be why there is a form of indecision on Ethereum, which results in the appearance of a Doji on the chart.

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Ethereum Doji
Ethereum (ETH) / Dollar (USD) / source: Binance

What scenario will happen?

For the second crypto by market capitalization, two scenarios can be considered. The first would be the descent of the price towards the low of the range around $1,000. This could happen following several economic news that will be released this week. Among these news, we can cite the Fed’s decision regarding interest rates, but also the “non farm payroll”. The release of this data usually results in high volatility in the market. Thus, it would be likely that a single candle in H1 would drive the price of ETH towards $1000.

For the second scenario, we can consider a rise in the price following the rebound on the support of $1280. In my view, this second scenario for Ethereum seems unlikely unless the current weekly candle closes as a Doji. For that, we would have to wait until the end of the week, when strong volatilities are imminent this week with the FOMCs and the NFPs.

The Doji forming on the Ethereum weekly chart appears to be a false signal for an upside. In my opinion, it lacks volume, and the RSI does not indicate that the digital asset is oversold. Of course, other indicators can predict the opposite. In any case, let’s keep an eye on how the market reacts after today’s and tomorrow’s economic news.

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