TA: Ethereum Could Avoid a Major Drop if it Closes Above One Key Level
Ethereum reacted to the downside and retested $4,050 against the US Dollar. ETH must recover above $4,250 and $4,300 to start a steady recovery wave.
Ethereum started a fresh decline from the $4,350 resistance zone.
The price is now trading below $4,250 and the 100 hourly simple moving average.
There is a key bearish trend line forming with resistance near $4,210 on the hourly chart of ETH/USD (data feed via Kraken).
The pair could extend losses if it fails to stay above the $4,050 support zone.
Ethereum Price Is Facing Hurdles
Ethereum attempted a recovery wave above the $4,300 resistance zone, similar to bitcoin. However, ETH price failed to extend gains above the $4,350 level.
A high was formed near $4,320 and the price started a fresh decline. There was a break below the $4,250 support zone. The decline gained pace below the $4,200 level and the 100 hourly simple moving average. A low was formed near $4,026 and the price is now correcting losses.
Ether price is back above $4,100 and $4,120 levels. It is now trading near the 50% Fib retracement level of the recent decline from the $4,321 swing high to $4,026 low.
An initial resistance on the upside is near the $4,200 level. It is close to the 61.8% Fib retracement level of the recent decline from the $4,321 swing high to $4,026 low. The first major resistance is near the $4,250 level and the 100 hourly simple moving average.
Source: ETHUSD on TradingView.com
A close above the $4,200 and $4,250 levels could start a fresh increase in the near term. In the stated case, the price might rise towards the $4,350 level. Any more gains could lift the price towards the next key hurdle at $4,500.
More Losses in ETH?
If ethereum fails to start a fresh increase above the $4,250 level, it could extend losses. An initial support on the downside is near the $4,120 level.
The first key support is now forming near the $4,050 level. A downside break below the $4,050 support might push the price further lower. The next key support is near $4,000, below which there is a risk of heavy losses in the near term.
Hourly MACD – The MACD for ETH/USD is gaining pace in the bullish zone.
Hourly RSI – The RSI for ETH/USD is now near the 50 level.
Major Support Level – $4,050
Major Resistance Level – $4,250