Ethereum Faces Key Challenge, Why Another Drop Is Still Possible


Ethereum started a recovery wave above the USD 2,840 level against the US dollar. ETH now faces a major challenge near $2,905 and the 100 hourly SMA.

Ethereum started a significant recovery wave above the USD 2,840 and USD 2,850 levels. The price is still below $2,900 and the 100 hourly simple moving average. A major bearish trendline is forming with resistance near USD 2,900 on the ETH/USD hourly chart (data feed via Kraken). The pair needs to clear the $2,900 and $2,915 resistance levels to continue higher.

Ethereum Price Faces Resistance

Ethereum traded as low as $2,766 before starting a recovery wave. ETH was able to establish itself above the $2,800 resistance zone.

There was a move above the USD 2,840 and USD 2,850 resistance levels. Ether even climbed above the 23.6% Fib retracement level from the key decline from the $3,040 swing high to $2,766 low. It’s still below $2,900 and the 100 hourly simple moving average.

On the upside, initial resistance is seen near the $2,900 level. A major bearish trendline is also forming with resistance near USD 2,900 on the ETH/USD hourly chart.

Besides, the 100 hourly simple moving average acts as a barrier near $2,900. The next major resistance is near the $2,905 level. It is near the 50% Fib retracement level of the key decline from the $3,040 swing high to $2,766 low. A clear move above the USD 2,900 resistance could spark a fresh rise.

Source: ETHUSD on TradingView.com

The next major resistance on the upside could be $2,975. If there are further gains, the price may move towards the $3,030 resistance. More gains could send the price towards the $3,120 level.

New Drop in ETH?

If ethereum fails to gain momentum above the USD 2,900 resistance, it could trigger a downside correction. An initial support on the downside is near the $2,860 zone.

The first major support is near the USD 2,850 level. If there is a downside break below the $2,850 support, the price may revisit the key $2,800 support zone. More losses may well open the doors for a bigger drop towards the USD 2,600 or even USD 2,550 level.

Technical indicators

Hourly MACD – The MACD for ETH/USD is now losing pace in the bullish zone.

Hourly RSI – The RSI for ETH/USD is just above the 50 level.

Major Support Level – $2,850

Major Resistance Level – $2,900

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