Ethereum Price Consolidating Below $1,720: What Could Trigger Another Drop?
In the recent trading session, Ethereum, the world’s second largest cryptocurrency, has been showing signs of upward movement, gradually recovering from its support zone around $1,620. However, it remains below the key $1,700 mark and the 100 hourly Simple Moving Average, indicating potential challenges ahead.
Analyzing the hourly chart of ETH/USD, provided by Kraken data feed, we observe the formation of a significant bearish trend line with resistance near $1,720. This trend line could pose a drag on Ethereum’s recovery, potentially preventing it from going beyond the $1,700 and $1,720 resistance levels.
Similar to Bitcoin, Ethereum remains in a bear market, unable to break the $1,720 resistance. It dipped below the $1,660 level, leading to a temporary dip below the $1,630 support. The price tested the $1620 zone, setting a low before starting a recovery wave.
During this recovery wave, the price managed to surpass the $1,640 and $1,650 levels, with the bullish momentum pushing it closer to the 50% Fibonacci retracement level. This level represents a significant milestone, indicating a downward move from a swing high of $1,748 to a low of $1,620.
Despite the recent gains, Ethereum continues to trade below $1,700 and the 100-hour Simple Moving Average. Moreover, the hourly chart reveals the formation of a key bearish trend line near $1,720.
Immediate resistance lies near the $1,700 level and the 100 hourly Simple Moving Average, both of which coincide with the 61.8% Fibonacci retracement level. If Ethereum overcomes this hurdle, a promising recovery wave could ensue. Moving forward, the next substantial resistance zone is located near $1,720, concurrent with the aforementioned trend line.
If Ethereum manages to break through the resistance levels of $1,700 and $1,720, it could potentially start a sustained recovery phase. The next resistance target would be around $1,775, followed by a potential upside towards $1,820. In case of further gains beyond this level, the price might head towards the $1,850 resistance.
However, failure to clear the $1,700 resistance could trigger another downward spiral for Ethereum. In such a scenario, initial support can be expected around the $1,640 level. The next critical support level is located near $1,620, and a break below this could cause the price to crash towards the $1,550 support. Further losses could even push Ethereum towards the $1,500 zone.
Technical indicators provide additional insight into the current state of Ethereum. The hourly Moving Average Convergence Divergence (MACD) for ETH/USD suggests a loss of momentum in the bearish zone. On the other hand, the hourly Relative Strength Index (RSI) has crossed above the 50 level, suggesting a potential shift towards bullish sentiment.
In summary, Ethereum has shown a gradual upward movement, but is facing significant resistance at the $1,700 level. A break could initiate a substantial recovery wave, with targets for resistance at $1,720, $1,775 and potentially $1,820. Conversely, failure to overcome resistance could result in a decline towards the support levels of $1,640, $1,620, and possibly $1,550. Traders and investors should monitor this important level closely when they evaluate their Ethereum strategy.
