ETHUSDT price is on the downtrend channel with price respecting trendlines. Last week the price touched a resistance line close to $3900 level which is also a confluence of resistance.
We have horizontal resistance and downtrend channel resistance line close together which pose a resistance for the price.
After the price broke below the horizontal line at $3969, the price returned back to $3900 to verify the previous support area as a new resistance.
From $3900 level the price fell down to the first support at $3337 which did not hold the price. The $3150 level is previous support which held the price in the past from falling down. So this time the same support holded the price.
What we can see is the three large bearish candles suggesting strong bearish sentiment.The current support where the price is right now is not so strong we can rely it will hold for a long time.
We could see the price returning back to $3337 level and then continuing moving down to $2786 level which is strong support for the price.
While the price is now heading down it would be good to wait for the price to reach support level and then watch to get into the trade.
Entry level would be around $2786 level with stop loss level below previous lows. Entry is above the confluence of support which consists of horizontal support and downtrend channel support line.
Stop loss could be set to $2541 level because it is below previous candle lows. If the price breaks below stop loss level then it will mean the price has lost its ground and it will move further down.
Target levels are visible on the chart and the first target is $3783 level. That level is below the strong resistance level and inside the downtrend channel. That means it is reachable because the price will not need to break above strong resistance to be reached. And that level is below the confluence of resistance.
Second target is above the confluence of resistance so it will be harder to reach. Using trailing stop to protect the profit when the price first target would be a good decision.
Have in mind that the buying opportunity in this case when the trend is heading down is risky, but highly profitable. With a Risk:Reward ratio of R:R > 2 this trading opportunity is a good one to watch.
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