Recently, Ethereum price took a hit and dropped below the $3,000 mark. This decline in price has raised concerns among investors and traders in the cryptocurrency market. In order to prevent a major drop, Ethereum must maintain support above the key levels of $2,800 and $2,850.
One of the significant indicators of the current price movement is the formation of a bearish trend line with resistance at $3,120 on the hourly chart of ETH/USD. This trend line, along with the 100-hourly Simple Moving Average, is posing a challenge for the price to recover significantly. The recent test of the $2,900 zone further confirms the bearish sentiment in the market.
Despite the downward pressure, there are key resistance levels that Ethereum needs to surpass in order to regain bullish momentum. The immediate resistance is near the $3,020 level, followed by a major resistance at $3,120 and the 100-hourly Simple Moving Average. If the price manages to breach these levels, there is a possibility of a rally towards $3,250 and even $3,350. A break above the $3,350 resistance could open doors for a test of $3,500 and ultimately $3,620.
On the flip side, if Ethereum fails to break above the $3,120 resistance, it could face further downside pressure. The initial support is seen near the $2,940 level within the channel zone, followed by a major support at $2,850. However, the crucial support level to watch out for is $2,800. A clear break below this level could lead to a drop towards $2,650 and potentially $2,540 in the short term.
Examining the technical indicators, the MACD for ETH/USD is showing momentum in the bearish zone, indicating further downward pressure. Additionally, the hourly RSI for ETH/USD has dipped below the 50 level, signaling a bearish sentiment among traders. These indicators suggest that caution is warranted in the current market environment.
The recent decline in Ethereum price has put the cryptocurrency in a challenging position. While there is potential for a rally if key resistance levels are breached, the downside risks cannot be ignored. Traders and investors are advised to closely monitor the price movements and conduct thorough research before making any investment decisions. The volatility in the cryptocurrency market always carries risks, and it is crucial to approach trading with a well-informed perspective.
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