Ethereum retreated below the $4,650 level and now trades beneath critical technical indicators, raising concerns about further downside momentum. The second-largest cryptocurrency by market capitalization is showing bearish signals as it struggles to maintain support above $4,500, with technical analysis suggesting potential declines toward $4,340 if current levels fail to hold.
What to Know:
- Ethereum price dropped below $4,650 and is trading under the 100-hourly Simple Moving Average with bearish trend line resistance at $4,460
- Technical indicators including MACD and RSI have turned negative, with RSI falling below the 50 zone signaling weakening momentum
- Key support sits at $4,340, and a break below this level could trigger further declines toward $4,260 or even $4,150
Recent Price Action Shows Mixed Signals
Ethereum attempted a recovery after testing support near $4,260, similar to Bitcoin's recent bounce. The cryptocurrency managed to climb above resistance levels at $4,320 and $4,350 during this brief rally.
The price surpassed the 50% Fibonacci retracement level of the decline from the $4,660 swing high to the $4,261 low. However, sellers emerged near the $4,480 resistance zone, preventing further upward movement.
Bulls made two separate attempts to break above $4,500 but failed to generate sufficient buying pressure. The 61.8% Fibonacci retracement level from the key decline continues acting as a significant barrier to upward movement.
Technical Analysis Reveals Bearish Structure
Ethereum now trades below both the $4,450 level and the 100-hourly Simple Moving Average, indicating weakening momentum. A bearish trend line has formed with resistance positioned at $4,460 on the hourly chart of ETH/USD.
Should the price attempt to move higher, immediate resistance appears near $4,450. The next significant resistance level sits at $4,480, followed by the major resistance at $4,500.
A decisive break above $4,500 could propel Ethereum toward $4,565 resistance.
Further strength beyond $4,565 might lead to additional gains in subsequent trading sessions, potentially targeting the $4,650 resistance zone or even $4,720.
Downside Risks Mount With Key Support Levels
If Ethereum fails to reclaim the $4,500 resistance level, downward pressure may intensify. Initial support on the downside appears near $4,375, with the first major support located at $4,340.
A clear break below $4,340 support could push the price toward $4,320. Additional selling pressure might drive Ethereum toward the $4,260 support level, where it previously found buyers. The next key support level sits at $4,150, which could become relevant if broader selling pressure emerges across cryptocurrency markets.
Understanding Key Technical Terms
The Moving Average Convergence Divergence (MACD) indicator measures momentum by comparing two moving averages of a security's price. When MACD trades in bearish territory, it suggests downward momentum is building.
The Relative Strength Index (RSI) oscillates between 0 and 100, with readings below 50 typically indicating bearish sentiment. Fibonacci retracement levels help identify potential support and resistance areas based on previous price movements.
These technical indicators, combined with price action analysis, provide traders with tools to assess potential future price direction and key levels to monitor.
Current Technical Picture
Hourly MACD data shows the indicator gaining momentum in bearish territory, suggesting continued downward pressure. The hourly RSI has fallen below the 50 level, reinforcing the bearish outlook for near-term price action.
Major support remains at $4,340, while major resistance sits at $4,500. These levels represent critical zones that could determine Ethereum's next directional move.
Closing Thoughts
Ethereum faces technical headwinds as it trades below key moving averages and resistance levels, with bearish indicators suggesting potential for further declines. The cryptocurrency's ability to hold above $4,340 support will likely determine whether the current weakness extends toward lower levels or if buyers emerge to defend current prices.