ETH/USD Bullish Reversal Setup – Breakout from Descending Channe

Trend/Pattern

The price has been trading within a descending channel, shown by the red zone and two parallel blue trend lines.

Currently, price action is near the lower boundary of the channel, indicating potential trend exhaustion and a reversal zone.

🟣 Support Level

Marked clearly in the purple shaded region (~$4,356 to $4,445).

Price has tested this support multiple times, showing strong buying interest.

This zone acts as a demand area, and the chart suggests it might hold for a bounce back.

📈 Entry Point

$4,445.42 is the suggested long entry.

This is slightly above the current price ($4,477.92), meaning the setup might already be in play or close to triggering.

The logic: Wait for confirmation above the support before entering.

🛑 Stop Loss

$4,359.38 is the suggested stop loss (below the support).

This gives a tight risk margin, minimizing losses if the setup fails.

It's placed just under the recent lows to avoid stop hunts.

🎯 Target Point

$4,766.11 is the profit target, based on the previous resistance and top of the descending channel.

Represents a return to the upper boundary of the larger trend.

This implies a Risk:Reward Ratio (RRR) of approximately 3:1, which is favorable.

⚖️ Risk-Reward Evaluation

Entry: $4,445.42

Stop Loss: $4,359.38 → Risk = $86.04

Target: $4,766.11 → Reward = $320.69

Risk/Reward Ratio: ~3.7:1 — Excellent RRR

📊 Summary: Trading Idea
Element Value
Trade Type Long (Buy)
Entry Point $4,445.42
Stop Loss $4,359.38
Target Point $4,766.11
Risk/Reward ~3.7:1
Confirmation Needed? Yes – Watch for break and close above $4,445
✅ Pros of the Setup

Strong demand zone bounce

Clean descending channel structure

Tight stop loss, good RRR

Potential breakout from the channel

⚠️ Risks

If price breaks below support, pattern fails.

Short-term volatility could fake out breakout.

Wait for volume confirmation and/or a bullish candlestick pattern for safer entry.