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Following an extended phase of consolidation without a definitive trend, the cryptocurrency market has finally experienced a correction, with the majority of coins seeing a decline in value. Ethereum has also been affected, with its price dropping by 14%, reaching a notable support level.
Technical Analysis
By Shayan
The Daily Chart
Ethereum recently exceeded its previous significant swing high at $2K due to a vigorous uptrend, generating a notable bullish sentiment by signaling a potential trend reversal. However, the price quickly established a head-and-shoulders reversal pattern and faced rejection, leading to a 14% drop.
Nonetheless, the price has now reached an important support area, which includes the 50-day moving average at $1800 and the 100-day moving average at $1705.
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Consequently, the price movements within the $1.7K-$1.8K range should be observed closely, as a breakout from this essential support zone is likely to influence Ethereum’s near-term trajectory. Should the cryptocurrency dip below this critical level, its prior major swing low at $1.4K will act as the primary support for the mid-term.
Source: TradingView
The 4-Hour Chart
On the 4-hour chart, Ethereum’s price surge concluded when it attempted to break through the upper trendline of the channel at $2.1K. Following an impulsive decline, Ethereum’s price has now reached the middle boundary of the channel, a key support/resistance area, and is currently struggling to break below it.
If the price drops beneath this level, it could initiate a downtrend towards the $1.7K level. However, if the cryptocurrency manages to find support and reverses the downtrend, a rally towards the upper boundary will likely be the most probable outcome for Ethereum in the short term.
Source: TradingView
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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.
Cryptocurrency charts by TradingView.
