Ethereum, the second-largest cryptocurrency by market capitalization, has seen a fresh decline, falling below the crucial level of $3,550. The digital currency is currently exhibiting bearish signs, leading analysts to forecast a potential drop below $3,150.
The price of Ethereum is currently trading below the $3,500 mark, and the 100-hourly Simple Moving Average, a key indicator used by investors to forecast future price movements. Furthermore, a bearish trend line has formed with significant resistance at the $3,420 mark on the hourly chart of ETH/USD, according to data provided by cryptocurrency exchange Kraken.
If Ethereum fails to maintain a position above the $3,550 support zone, experts predict the digital currency could continue its downward trajectory. Ethereum’s struggle to initiate a fresh increase above the $3,550 level led to an extension of losses, a trend observed across other leading cryptocurrencies, including Bitcoin.
Ethereum’s bearish momentum increased as it plunged below the $3,450 and $3,300 levels. The digital asset even dipped below $3,220 and experienced a sudden drop below the $3,120 level. The price reached a low of $3,100 and is currently consolidating its losses. This drop resulted in a close below the 50% Fibonacci retracement level of the recovery wave from the $3,100 swing low to the $3,553 high.
The cryptocurrency is now facing resistance near the $3,350 level, with the first significant hurdle near the $3,400 mark. The main resistance is forming around the $3,420 level. However, if Ethereum can break through the $3,420 resistance level, it could potentially push towards the $3,500 mark, paving the way for further gains. If this scenario unfolds, Ethereum could potentially surge towards the $3,550 or even the $3,650 resistance zone.
On the other hand, if Ethereum fails to overcome the $3,420 resistance, it could continue its downward movement. The initial support on the downside is hovering near the $3,200 level, with the first significant support near the $3,120 zone. If Ethereum breaks through the $3,120 support, it could potentially push towards the $3,050 support level. Further losses could send the digital currency spiraling towards the $3,000 support level in the near term, with the next key support at $2,880.
The Moving Average Convergence Divergence (MACD) for Ethereum/USD is currently gaining momentum in the bearish zone. Meanwhile, the Relative Strength Index (RSI), a momentum oscillator used to measure the speed and change of price movements, is now below the 50 zone. This indicates that the sell-off in Ethereum may not be over yet. The major support level to watch is $3,120, and the major resistance level is $3,420.
