Range trading and key level strategies under the hidden concerns of the Ethereum head and shoulders pattern

The core logic and potential path of the head and shoulders pattern

• Expectation of a rebound at the right shoulder of the head and shoulders pattern: If a head and shoulders pattern forms on the hourly chart, there could be a rebound to around 3850 dollars at the right shoulder, and after the rebound ends, it will continue to decline—currently, attention should be paid to the strength of the rebound, with 3639 dollars being a key resistance. If it cannot break through, the right shoulder pattern will become more defined;

• Ladder defense at support levels: Support levels at 3490-3450-3402 USD form a ladder support. A break below 3423 USD on the 4-hour chart will test 3307 USD. If support is lost, it will accelerate the downward process of the head and shoulders pattern.

Key Level Trading Strategy

• Long conditions:

1. Breakthrough at $3526 → Long position on the right side (only short-term long), target $3555 → $3609, recover stop loss;

2. Pull back to confirm support at 3454 USD → Lightly enter long, stop loss if it falls below 3409 USD;

3. Long position at 3371 USD on the left side, stop loss at 3333 USD (deep pullback for low absorption, requires confirmation of head and shoulders pattern completion).

• Short selling conditions:

1. If it breaks below $3513 with volume → short on the right side, target $3490 → $3450, if it rebounds and cannot recover, stop loss;

2. Short sell with a light position at $3609, stop loss at $3639 (short selling at resistance level, confirmation needed for weak rebound of the right shoulder);

3. Break below 3423 USD on the 4-hour level → Increase short position, looking down at 3307 USD, in resonance with the head and shoulders pattern decline.

Operation tips for patterns and right shoulder rebounds

• head and shoulders pattern observation points:

◦ The height of the right shoulder rebound is key. If it cannot approach 3850 USD or encounters resistance at 3639 USD, it indicates a weak pattern and stronger downward momentum;

• Constraints of the short-term range:

◦ Before breaking through the $3450-3555 range, treat it as a fluctuation. Both long and short positions should be quick in and out. Increase positions after confirming the head and shoulders pattern.

Summary: Ethereum's short-term focus is on the rebound of the right shoulder of the head and shoulders pattern and support defense. The core operation: short-term long relies on breaking through $3526, while short positions closely monitor the break of $3513. Be cautious of the decline after the completion of the head and shoulders pattern, and do not blindly chase rebounds.