After a long period of consolidation without a clear direction, the cryptocurrency market eventually underwent a correction, declining the value of most coins. Ethereum was no exception, with its price plummeting 14% to reach a critical support zone.
technical analysis
To Shayan
daily chart
Ethereum recently surged above the previous major swing high of $2,000 on an impulsive uptrend, signaling a positive trend reversal and providing some pretty bullish sentiment. However, the price soon formed a head-and-shoulders reversal pattern, was rejected, and plummeted 14%.
Nonetheless, the price is now reaching a key support area consisting of the 50-day MA of $1800 and the 100-day MA of $1705.
Price action within the $1.7K to $1.8K range should therefore be closely monitored as a breakout from this critical support zone will likely determine Ethereum’s near-term direction. The previous major swing at $1.4K will serve as major support for the price in the medium term should the currency break below this key area.
4 hour chart
According to the 4-hour timeframe, Ethereum’s price rally ended when it attempted to break out of the channel’s upper trendline at $2.1 thousand. As a result of the impulsive drop, Ethereum’s price has now reached the mid-channel boundary, a key support/resistance area, and is struggling to break below.
A break below this level could trigger a downtrend towards $1.7 million. However, if the cryptocurrency finds support and reverses its downtrend, it will be the most likely scenario for a rally towards the Ethereum upper end in the short term.
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cryptocurrency chart By TradingView.