The cryptocurrency market is currently experiencing a pullback, following Bitcoin’s surge to a new all-time high. Ethereum (ETH) is also feeling the effects of this downward movement, after recently hitting a yearly high of $4,094. The price of Ethereum has been on a decline since then, with it now trading below the 100-day Moving Average (MA) in both the 1-hour and 4-hour timeframes. However, the daily timeframe tells a different story. So, the big question remains: will the price of Ethereum continue on a downward trajectory, or is a reversal on the horizon? At the time of writing, Ethereum was trading around $3,360, showing a slight increase of 0.64% in the last 24 hours.
Technical Analysis of Ethereum’s Price
When analyzing the chart, it is evident that Ethereum has established a support level of $3,067, along with resistance levels of $3,681 and $3,591. However, if the price continues to move downwards, new support and resistance levels could be formed. Looking at the 4-hour timeframe, the price of Ethereum is currently trending below the 100-day moving average, suggesting a strong downtrend that could potentially extend further downward. The Relative Strength Index (RSI) indicator confirms this downward trend, as the RSI signal line is below the 50 line. Furthermore, the MACD indicator in the 4-hour timeframe shows a bearish signal, with the histogram dropping below the zero line and both the MACD line and signal line crossing below the zero line.
Possible Scenarios for Ethereum’s Price
If the price of Ethereum continues to decline and breaks below the support level of $3,067, it could pave the way for further downward movement and the creation of a new support level. On the other hand, if the price fails to breach this support level, a reversal could be on the cards, signaling a potential upward trend. In this scenario, Ethereum could break above the resistance levels of $3,681 and $3,591, and resume its bullish momentum.
The current technical indicators point towards a bearish trend for Ethereum’s price, with the possibility of further downward movement if key support levels are breached. However, a failure to break below the support level of $3,067 could signal a trend reversal and a potential upward movement. As always, it is essential for investors to conduct their own research and due diligence before making any investment decisions in the volatile crypto market.