Ethereum Price Momentum Rolls Over, Bearish Move Warning

Overview

Ethereum has recently experienced a significant upward move but has encountered resistance near the $3,050 mark. As the price struggles to maintain its position, there are indications that it may continue to decline, potentially dropping below the $2,900 level.

Ethereum’s Recent Price Action

Ethereum initiated a recovery wave, managing to rise above the $2,920 and $2,950 levels, similar to the movement observed in Bitcoin. The price briefly surpassed the $3,000 resistance, reaching a high of $3,053 before encountering selling pressure from bears. This resulted in a sharp decline, with the price falling below the key levels of $3,000 and $2,980, ultimately dropping beneath $2,950.

As the price continued to decline, a low was established at $2,907. Currently, Ethereum is trading below the 23.6% Fibonacci retracement level of the downward move from the $3,053 swing high to the $2,907 low. Although the price is now hovering above $2,950 and the 100-hourly Simple Moving Average, it remains vulnerable to further losses.

A short-term contracting triangle has formed, presenting resistance at the $2,930 level on the hourly chart of ETH/USD. The immediate resistance is noted near the $2,940 level, while the first key resistance is positioned around $2,955. A significant resistance level is also identified near $2,980, close to the 50% Fibonacci retracement level of the downward move from the recent high to the established low.

If Ethereum manages to break above the $2,950 resistance, it could lead to a potential rally towards the $3,000 resistance. A successful breach of the $3,000 region may open the door for further gains, possibly pushing Ether towards the $3,050 resistance zone or even higher.

Potential for Further Decline

However, if Ethereum fails to overcome the $2,955 resistance, it risks entering a fresh decline. Initial support is observed around the $2,900 level, with a critical support zone near $2,880. A clear move below this support could trigger a decline towards the $2,840 level, with further losses potentially leading to a drop towards the $2,800 region. The next significant support level is identified at $2,720.

Technical Indicators

• Hourly MACD: The MACD for ETH/USD is gaining momentum in the bearish zone.
• Hourly RSI: The RSI for ETH/USD is currently below the 50 mark.
• Major Support Level: $2,900
• Major Resistance Level: $2,955

From author

The current price action of Ethereum highlights the ongoing battle between bullish and bearish forces in the market. As price levels fluctuate, traders and investors are closely monitoring key support and resistance zones. The formation of technical patterns, such as the contracting triangle, suggests that market participants are awaiting a decisive move that could dictate the next phase of Ethereum’s price trajectory.

Impact on the crypto market

• Ethereum’s struggle to maintain upward momentum could influence trader sentiment across the broader cryptocurrency market.
• A potential decline below critical support levels may lead to increased selling pressure, impacting overall market liquidity.
• Resistance levels could serve as psychological barriers for traders, affecting decision-making and market strategies.
• Technical indicators signal caution, suggesting that traders should remain vigilant regarding potential bearish trends.
• The interactions between Ethereum and Bitcoin’s price movements may further shape market dynamics and investor behavior.