Ethereum  ETH price has created conditions where many short sellers have dived into pushing ETH price lower. ETH Bears are convinced of a new bear market. However, they may have just played right into the hands of the bulls.

Ethereum price ready to begin a short squeeze that could rally

Ethereum's collapse to close the weekly price chart by double-digit percentage losses ended near a major support level zone. The 38.2% Fibonacci retracement level, weekly Kijun-Sen, and a high trade volume node in the volume profile share the $3,100 to $3,350 price area.

The most essential technical information in the daily weekly Ichimoku price chart is the discrepancy between the candlestick swing pattern and the Composite Index. Ethereum ETh price has a series of higher lows while the Composite Index has lower lows in fact, the Composite Index just hit a low not seen since September 2019. That behavior has created hidden bullish price divergence.

Hidden bullish price divergence is a warning that the current price corrective move is about to end and that a resumption of the ETH uptrend is likely to continue soon. As a result, a trade volume opportunity is now present on the Point and Figure chart.

There is a theoretical long entry for Ethereum price on its $100/3-box reversal Point and Figure chart. The long buy setup is a buy stop order at price of $3,500, a stop loss at price of $3,100, and a profit target at price of $5,500. The theoretical long buy trade is a 5:1 reward/risk setup with a projected profit target of over 60% from the entry. A three-box trailing stop loss would help protect any profit gain generated after hitting the entry.

There is no invalidation point for Ethereum ETH price within its theoretical long buy setup. If Ethereum price moves lower, the buy stop and stop loss move with the lower ETH price action, but the profit target remains the same.

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