Weekly RSI is forming higher lows while price action trends downward, indicating a potential reversal setup.
Price is consolidating near $3,054.13, a critical support level historically linked to buyer interest.
A breakout above $3,221.31 is needed to confirm a shift in trend and validate the divergence signal.
Wrapped Staked Ether (WSTETH) is exhibiting early signs of trend reversal as a bullish divergence is seen on the weekly chart. The asset is now trading at $3,115.69, down 1.5% in the past 24 hours. Although the asset has been trending downwards in the recent past, technical indicators are pointing to the possibility that bearish momentum is fading.
Price Holds Near Weekly Support
WSTETH has been in a multi-week bear market, printing lower lows consistently. Price action is now just above a strong support area around $3,054.13. The weekly chart indicates a downtrending price channel, with candles consistently testing the lower boundary. This level has historically served as a short-term demand zone, providing transient respite in historic drawdowns.
The opposition is still well identified at the price of 3221.31. This area has been restricting further upside impulses over the past few weeks, indicating a potentially very important region to monitor in case of the break following the breakout attempt.
Weekly RSI Divergence Hints at Potential Momentum Shift
Among the more prominent technical indicators are the Relative Strength Index (RSI) trend on the weekly timeframe. As WSTETH has been hitting new lows in price, the RSI has been registering higher lows - a typical bullish indication of a bullish divergence. The pattern is a typical sign of slackening selling pressure and it is commonly observed before a trend reversal or relief rally.
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The RSI now remains within the neutral zone, implying that the asset is not overbought or oversold. The divergence, however, enhances the likelihood of the shift in momentum particularly when accompanied by a robust price response to the support area.
WSTETH Momentum Remains Weak
In spite of the divergence, consumers have not gained control. The volume is tame, and no bullish candlestick patterns have confirmed a reversal to the latest weekly closing. For bullish divergence to translate into price movement, WSTETH would need to print a strong weekly candle, ideally breaking above immediate resistance.
Before the first round of trades, traders are urged to observe future weekly closings that can be verified. Until that time, the precaution is still justified, because the signals are only preparatory and not final. This may be setting up a possible change in momentum where the price is forming up on a price reversal as long as it continues to fade.
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