Ethereum, the world’s second-largest cryptocurrency, has been experiencing a corrective phase after reaching a crucial resistance level at $2,320. As expected, the price of ETH is now moving lower, and there are indications that it might even test the $2,050 support zone before the bulls takeover.
At the time of writing, Ethereum is trading below the $2,250 support zone and the 100-hourly Simple Moving Average (SMA). On the hourly chart of ETH/USD, we can observe the formation of two bearish trend lines, with resistance near $2,230 and $2,260. These levels are crucial as they will play a significant role in determining the direction of Ethereum’s price in the near term.
ETH started its downside correction after reaching the $2,325 level. The decline took it below key levels such as $2,300, $2,265, and even the $2,200 level. This decline mirrored Bitcoin’s movement during the same period. However, the price reached a low point near $2,180 and is now attempting to stage a fresh increase.
Currently, Ethereum is trading below the 100-hourly SMA and is facing resistance near the $2,230 level, as indicated by the bearish trend lines. Additionally, the 50% Fibonacci retracement level of the downward move from the $2,326 swing high to the $2,180 low is also acting as a resistance.
The primary resistance level, however, is situated at $2,350. A clear move above this level could initiate a decent increase, with the next significant resistance at $2,420. A successful breakthrough above $2,420 might even lead to a rally towards the $2,500 zone.
On the downside, the first support level is near $2,200, followed by a more critical support level at $2,180. A break below this level could trigger further bearish moves and potentially push the price towards the $2,120 support. In the worst-case scenario, if the selling pressure intensifies, Ethereum may even test the $2,050 level.
Analyzing the technical indicators, we can observe that the hourly MACD for ETH/USD is losing momentum in the bearish zone. This suggests that the selling pressure might continue in the short term. Furthermore, the hourly RSI is now below the 50 level, indicating a negative sentiment among traders.
Ethereum’s recent price correction is part of a natural market cycle. The cryptocurrency is currently facing resistance near the $2,230 and $2,260 levels. However, if the bulls stage a comeback and break through the $2,260 resistance, we might see a renewed upside momentum towards $2,350 and beyond.
As with any investment, it is crucial to conduct thorough research and exercise caution. The cryptocurrency market can be highly volatile and carries inherent risks. Therefore, it is advised to make investment decisions based on personal analysis and risk tolerance.
Disclaimer: The article provided is for educational purposes only and does not represent the opinions of NewsBTC. It is essential to conduct your own research and evaluation before making any investment decisions. Investing in cryptocurrencies entails risks and should be done at your own discretion.