• The theory of initially fell during the trading session on Tuesday, to break down below the $4500 level.
• However, we turn around and show signs of life, and we are in the middle of trying to form a hammer for the trading session.
• The hammer is a very bullish candlestick, and I think a lot of people will be watching that very closely.
   

(Click on image to enlarge)

The $4500 level is an area that a lot of people have been paying attention to recently, as it had previously been resistance, and now it’s starting to show a bit of “market memory” in showing support.
 

Technical Analysis

The technical analysis for this market is rather bullish in the short term, because we had shot much higher, to reach toward the $4800 level, have pulled back significantly, and then showed support at a level that we desperately needed to hang onto in the form of the $4500 level. By doing so, it shows a certain amount of resiliency in the Ethereum market, and it’s probably worth noting that a lot of traders out there look forward to the Federal Reserve cutting interest rates, which of course helps risky assets such as Ethereum.

If we do break down from here, I think there is a significant amount of support near the $4200 level, which not only has been important in the past, but it also houses the 50 Day EMA as well. In other words, I would anticipate that we would see a lot of support here. However, the one thing that does concern me a bit is that volume has been steadily dropping, which isn’t necessarily a good turn of events. This doesn’t necessarily mean that it needs to break down, it just shows that there isn’t as much in the way of conviction at the moment, or more importantly, “new money.” After the FOMC interest rate decision, we may get more of that, so pay attention to not only the direction the market moves, but also whether or not volume starts to pick up.

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