Ethereum Price Forms Bullish Candlestick Pattern But…

Key Takeaways:

• Ethereum started a major decline from $4,082 and settled below $3,500.
• ETH/USD traded below a key bullish trend line at $3,600 on the daily chart.
• The price tested the 50-day simple moving average (blue) and recovered over 10%.

NEW DELHI (CoinChapter.com) — Ethereum (ETH) is attempting a fresh increase from the $3,120 support. However, the bulls need to clear the $3,620 and $3,800 resistance levels to start a fresh uptrend.

Ethereum Price Holds Key Support

After a steady increase, Ethereum struggled to stay above the $4,000 level. A new multi-month high was formed at $4,082 before the price started a downside correction, like Bitcoin. There was a drop below the $3,800 and $3,650 support levels.

Ether traded below a key bullish trend line at $3,600 on the daily chart. Finally, the price spiked below the $3,200 support zone and tested the 50-day simple moving average (blue).

Ethereum found a strong buying interest near the 100-DSMA. It also stayed above the 50% Fib retracement level of the upward move from the $2,172 swing low to the $4,082 high. In the past few sessions, the price recovered by over 10% and climbed above $3,400.

The last daily candle signals a bullish formation, but the bulls are facing many hurdles on the upside. Immediate resistance is near the $3,550 level. The first major resistance is visible near the $3,620 level.

A clear move above the $3,620 resistance could send Ether further higher. The next major resistance sits at $3,800. If the bulls clear the $3,800 resistance, the price could resume its uptrend and rise toward the $4,080 resistance in the coming days.

Another Decline In ETH?

Recently, there was a lot of FUD related to the Ethereum Foundation facing scrutiny from an unnamed “state authority”, and how the SEC wishes to define ETH as a security.

If Ethereum struggles to clear the $3,620 resistance, there could be another bearish reaction. Immediate support sits near the $3,400 level. The first major support sits near the $3,120 level and the 50-day simple moving average (blue).

The next key support is near the $2,620 level. It coincides with the 76.4% Fib retracement level of the upward move from the $2,172 swing low to the $4,082 high. A downside break and a daily close below the $2,620 support could increase selling pressure. In the stated case, ETH could decline toward the $2,150 support level in the coming weeks.

Overall, Ethereum price is gaining bullish momentum above $3,400 and is well above the 50-DSMA. Having said that, ETH must clear the $3,620 and $3,800 resistance levels to resume the rally.