After facing strong resistance at the $2,320 level, Ethereum price has entered a correction phase. The bulls are currently taking a step back, allowing the bears to push the price lower. There is a possibility that Ethereum may test the $2,050 support zone before the bulls regain control.
As the correction takes place, Ethereum is trading below the $2,250 support zone and the 100-hourly Simple Moving Average. On the hourly chart of ETH/USD, there are two bearish trend lines forming with resistance near $2,230 and $2,260. These trend lines act as major obstacles for the bulls to overcome.
Starting from the $2,325 level, Ethereum price began its downward move. It broke through the $2,300 and $2,265 levels, following the footsteps of Bitcoin. Eventually, the bears managed to push the price below the $2,200 level, marking a low near $2,180. Nonetheless, Ethereum is now attempting a fresh increase, with a move above the $2,200 level.
As Ethereum climbs higher, it faces resistance near the $2,230 level. This is where the two bearish trend lines come into play, posing additional challenges for the bulls. The second trend line is especially significant as it aligns with the 50% Fib retracement level of the previous downward move. A close above the $2,260 resistance level could potentially result in a push towards $2,325.
The main resistance stands at $2,350, and a clear move above this level could initiate a considerable increase in Ethereum’s price. In that case, the next resistance sits at $2,420, and further rally towards the $2,500 zone might ensue. However, failure to clear the $2,260 resistance could lead to a fresh decline.
If the downside prevails, Ethereum could find initial support near the $2,200 level, followed by the $2,180 zone, which is a crucial support level to monitor. A break below $2,180 might trigger a bearish trend, potentially guiding Ethereum towards the $2,120 support level. Subsequent losses could push the price further down to the $2,050 level.
Looking at the technical indicators, the MACD for ETH/USD is losing momentum and signaling a bearish trend. Additionally, the RSI for ETH/USD has dropped below the 50 level, indicating a weakening bullish momentum.
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