Ethereum Bears Emerge: Is a Deeper Pullback Coming?

Ethereum Price

The second largest digital currency by market capitalization, Ethereum, is currently trading below key resistance levels indicating weakness as the wider market corrects. This creates bearish pressure on Ethereum; the bulls and traders remain vigilant on the critical level support to determine whether ETH could extend a deeper pullback.

Ethereum Price Struggles Below $3,400

A higher attempt at Ethereum trading was recently made but it could not hold on above $3,350 and $3,400. Close only more volatile than Bitcoin: Ethereum remains under a firm bearish pressure, unlike Bitcoin which displayed fairly a strong signal. A contracting triangle pattern has now completed near $3,270; the bearish breakout shows that the Bulls may struggle soon on Ethereum.

The price is at present trading below the 100-hourly Simple Moving Average in an area that is just above $3,200. This consolidation came after testing a recent high of $3,361 and a low of $3,201 as well. The bears are regaining control as Ethereum as failed to break up the key resistance levels.

Key Resistance Levels Hindering Recovery

Based on Ethereum’s prior daily price chart, a few resistance areas are also evident on the current chart below. The price is experiencing its first significant resistance at $3,280 in tandem with the 50% Fibonacci retracement level of the subsequent price drop from the high of $3,363 to a low of $3,201.

The first real resistance is located at $3,300, and it matches the 61.8% Fibonacci retracement level. Should Ethereum recover back towards the $310, it could push toward the $320- $330 barrier, which is likely to be defended by sellers.

For Ethereum bulls to prevail in short-term trading, the digital currency needs to close and sustain a breakout above $3,350. This can open the way to the test of the $3,450 ceiling and nearest upside targets at $3,550 and $3,580.

Bearish Indicators Suggest Downside Risks

The markets remain unfriendly, and I observe several bearish indicators that show that Ethereum may not get to profit from a recovery anytime soon. The current hourly MACD of ETH/USD is at the bearish formation, and its histogram is growing, indicating the weakening momentum of the coin.

In the same regard, the hourly RSI is below 50, meaning that bearish pressure supersedes bullish push in the coin. All these signals underpin the risk that has emerged as the Ethereum price is approaching vital support levels.

Critical Support Levels to Watch

On the flip side, Ethereum’s lower support line is currently at $3200. However, the first bolster is at $3,150, which has been a conical support level before. Below $3,150 there is the second support level at $3,120.

Such a bearish outlook remains valid as long as the price remains below $3,120, and while the price reaches the bottom near $3,050. However, depending on the degree of bearish pressure, Ethereum may extend its losses towards the $3,000 psychological level, which we expect may provide a strong buying interest.

Potential Scenarios for Ethereum’s Price Movement

Ethereum’s current price action suggests two possible scenarios:

  • Bullish Breakout: If Ethereum is able to break through $3,300 again and get a good breakout over $3,350, it could consolidate the new higher high and sustain another round of bullishness. In this case, the price might target the $3,450 level first and then lower towards the $3,550 or higher in the upcoming days.
  • Bearish Breakdown: In contrast, a position above $3,200 and a break below $3,150 is likely to lead to a more painful correction. Breaking below $3,120 can bring increased selling pressure, and take Bitcoin to $3,050 or as low as $3000 depending on panic selling.

Further sessions will decide on the near future of Ethereum with focus on market sentiment on it.

Technical Analysis Summary

  • MACD: Continues to gain positive momentum in the bearish zone which indicates downside risks.
  • RSI: Less than 50 which is interpreted as a bearish trend.
  • Major Resistance Levels: $3,280, $3,300, $3,350.
  • Major Support Levels: $3,200, $3,150, $3,120.

Broader Market Context

Ethereum, for example, also operates within the context of performance based on market indicators and most importantly the dominance of Bitcoin. Bitcoin in general reached a new ATH recently and took the focus to itself leaving Ethereum in the rearview mirror. It only becomes even more challenging to forge almost the same level of market sentiment as seen by Bitcoin lately as the inflow of capital chokes on Ethereum’s attempts to do the same, as evidenced by the following chart comparing market momentum between the two premier cryptocurrencies.

A Crossroads for Ethereum

On the existing price chart, the Ethereum outlook is somewhat complicated. However, there is always the chance of a breakout but the going is getting dangerous, at least from the bearish point of view and the important levels of resistance. Traders and investors need to pay more attention to the $3,150 – $3,300 range for Ethereum.

A bullish signal can be identified with a breakout above $3,350 while a bearish signal is given by a breakdown of $3,150. From the current position, the market will need to wait for the next step for Ethereum and its future will largely depend on the tendencies within the next days along with the overall tendencies in the market along with investors.

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