Struggling to Break Above Resistance
Despite attempting to climb above the $3,725 resistance level, Ethereum’s price has faced rejection and is currently trading near $3,500. The 100-hourly Simple Moving Average is also in close proximity, indicating a struggle for the digital asset to make significant gains. A key bullish trend line with support at $3,510 was breached on the hourly chart of ETH/USD, suggesting a potential downturn in the near term. However, there is still hope for a fresh increase if Ethereum manages to stay above the $3,420 support zone.
Price Rejection and Decline
Following a modest increase above the $3,550 resistance level, Ethereum managed to surpass the $3,650 zone. Unfortunately, the bulls encountered strong resistance around $3,725, leading to a sharp decline. The price reached a high of $3,726 before retracing its gains. Subsequently, Ethereum experienced a drop below $3,600 and $3,550, signaling a reversal in bullish momentum. A crucial bullish trend line at $3,510 was broken, while the pair dipped below the 50% Fib retracement level from the recent swing low at $3,224 to the high of $3,726.
Current Price Action and Outlook
Presently, Ethereum is hovering around $3,500, trading alongside the 100-hourly Simple Moving Average. Immediate resistance is at the $3,520 level, with the primary hurdle located at $3,560. A breakthrough above this level could pave the way for testing the $3,610 mark, followed by a potential move towards $3,650. However, the key resistance remains at $3,725, which, if breached, could signal a bullish trend with a possible rally towards $3,800 and beyond, possibly hitting $4,000.
Potential Downside Risk
If Ethereum struggles to overcome the $3,610 resistance level, it may face further downside pressure. Initial support is expected around $3,475, with a more significant support zone near $3,420, representing the 61.8% Fib retracement level from the recent swing low. Additional support lies at $3,340, with a breakdown below this level potentially pushing the price towards $3,240 and even $3,120 in the event of continued bearish momentum.
Technical Indicators and Key Levels
Hourly MACD: The MACD for ETH/USD is currently showing signs of a bearish trend, indicating a potential continuation of the downward movement.
Hourly RSI: The RSI for ETH/USD has dropped below the 50 level, highlighting the increasing selling pressure in the market.
Key Support Level: $3,420
Key Resistance Level: $3,610
Stay Cautious Amidst Price Volatility
As Ethereum grapples with key resistance levels and potential downside risks, traders are advised to exercise caution and closely monitor price movements. The cryptocurrency market remains highly volatile, and unexpected fluctuations could impact trading strategies. Keeping a close eye on technical indicators and key support/resistance levels can help navigate the current market conditions and make informed trading decisions.
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