Key Takeaways:
Ethereum (ETH) is showing a few bearish signs from $3,640. However, ETH could recover if there is no daily close below the 50-DSMA.
This past month, we saw a bearish reaction in Ethereum from the $4,082 high. ETH declined below the $3,880 and $3,750 support levels. There was a move below the 23.6% Fib retracement level of the key increase from the $2,172 swing low to the $4,082 high.
A sharp decline was below $3,200, but the bulls were active above the $3,000 support. More importantly, Ether stayed above the 50-day simple moving average (blue).
Ethereum recovered losses and climbed above the $3,550 level. However, the bears were active near the $3,640 zone. The price again moves below the $3,550 level, like Bitcoin below $68,000. It is now testing a connecting bullish trend line with support at $3,325 on the daily chart.
The bears seem to attempt a daily close below the 50-day simple moving average (blue). If there is a daily close below the trend line support and the 50-DSMA, there could be a continuation of the downside.
The first major support below the trend line sits at $3,120. The next key support is near the $2,900 level. It coincides with the key increase’s 61.8% Fib retracement level from the $2,172 swing low to the $4,082 high.
A downside break and a daily close below the $2,900 support could increase selling pressure. In the stated case, ETH could decline toward the $2,620 support level in the coming days.
Conversely, Ethereum bulls might manage to protect losses below the trend line support. The price might recover and test the $3,500 resistance in the stated case. The first major resistance is visible near the $3,640 level.
A clear move above the $3,640 resistance could send Ether higher. The next major resistance is $3,800. If the bulls clear this resistance, the price could resume its uptrend and rise toward the $4,080 resistance in the near term.
Overall, Ethereum’s price is approaching crucial support at $3,35, which is 50-DSMA. ETH must stay above the $3,325 support to avoid a larger decline.
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