In recent trading sessions, Ethereum, the world’s second-largest cryptocurrency, has shown signs of upward movement, gradually recovering from its support zone around $1,620. However, it remains below the crucial $1,700 mark and the 100-hourly Simple Moving Average, indicating potential challenges ahead.
Analyzing the hourly chart of ETH/USD, provided by Kraken’s data feed, we observe the formation of a significant bearish trend line with resistance near $1,720. This trend line could pose an obstacle for Ethereum’s recovery, potentially preventing it from surpassing the resistance levels at $1,700 and $1,720.
Similar to Bitcoin, Ethereum has remained in a bearish state, unable to breach the $1,720 resistance. It experienced a decline below the $1,660 level, leading to a temporary plunge below the $1,630 support. The price tested the $1,620 zone, establishing a low point before embarking on a recovery wave.
During this recovery wave, the price managed to surpass the $1,640 and $1,650 levels, with bullish momentum pushing it closer to the 50% Fibonacci retracement level. This level represents a significant milestone, denoting the downward move from the $1,748 swing high to the $1,620 low.
Despite the recent gains, Ethereum continues to trade below $1,700 and the 100-hourly Simple Moving Average. Furthermore, the hourly chart reveals the formation of a crucial bearish trend line near $1,720.
The immediate resistance lies near the $1,700 level and the 100-hourly Simple Moving Average, both of which coincide with the 61.8% Fibonacci retracement level. Should Ethereum overcome these hurdles, a promising recovery wave may ensue. Subsequently, the next substantial resistance zone lies near $1,720, in conjunction with the aforementioned trend line.
If Ethereum manages to break through the resistance levels at $1,700 and $1,720, it could potentially initiate a sustained recovery phase. The subsequent resistance target would be around $1,775, followed by a potential rise toward the $1,820 level. In the event of further gains beyond this level, the price may aim for the $1,850 resistance.
However, failure to clear the $1,700 resistance could trigger another downward spiral for Ethereum. In such a scenario, initial support can be expected around the $1,640 level. The next critical support level lies near $1,620, and a break below this mark may cause the price to plummet toward the $1,550 support. Further losses could even push Ethereum toward the $1,500 zone.
Technical indicators provide additional insights into Ethereum’s current status. The hourly Moving Average Convergence Divergence (MACD) for ETH/USD indicates a loss of momentum in the bearish zone. On the other hand, the hourly Relative Strength Index (RSI) has crossed above the 50 levels, suggesting a potential shift toward bullish sentiment.
To summarize, Ethereum has displayed gradual upward movement, but it faces significant resistance at the $1,700 level. A breakthrough could initiate a substantial recovery wave, with resistance targets at $1,720, $1,775, and potentially $1,820. Conversely, failure to surpass the resistance may result in a decline towards the support levels at $1,640, $1,620, and possibly $1,550. Traders and investors should monitor these crucial levels closely as they evaluate their Ethereum strategies.
Source: https://bitcoinworld.co.in/ethereum-price-consolidates-below-1720-what-could-trigger-another-decline/