Ethereum Nosedives 10%, But This Support Could Trigger Fresh Increase
Ethereum started a sharp decline after it failed to stay above the $450 support against the US Dollar. ETH price is likely to bounce back as long as it is above the $406 support zone.
- Ethereum is down over 10% and it broke the $460 and $450 support levels.
- The price even traded close to the $420 support and settled below the 100 hourly simple moving average.
- There is a key bearish trend line forming with resistance near $438 on the hourly chart of ETH/USD (data feed via Kraken).
- The pair is likely to resume its upward move as long as it is above $420 or $406 in the near term.
Ethereum Price Testing Key Support
After trading close to the $500 handle, Ethereum started a downside correction against the US Dollar. ETH price broke the $460 support zone to move into a short-term bearish zone.
However, the bulls lost control and ether price declined sharply below the $450 support level. The price is down over 10% and it even broke the $435 support. It traded close to the $420 support and settled below the 100 hourly simple moving average.
A low is formed near $422 and the price is currently attempting an upside correction. There was break above the $435 level, plush ether recovered above the 23.6% Fib retracement level of the recent decline from the $490 swing high to $422 low.
Ethereum price trades below $440. Source: TradingView.com
The bulls are currently struggling to gain pace above $435 and $440. There is also a key bearish trend line forming with resistance near $438 on the hourly chart of ETH/USD.
The next key resistance is near the $455 level since it is close to the 50% Fib retracement level of the recent decline from the $490 swing high to $422 low. On the downside, the price is likely to remain well bid near the $420 level. The next major support is near the $406 level, below which Ethereum could move into a bearish zone.
Fresh Increase in ETH
If Ethereum stays above the $420 support zone, it could start a fresh increase above $438 and $440. A successful break above $440 might increase chances of a push above $450.
In the mentioned case, the bulls need to gain strength above the $455 resistance. If they succeed, the price is likely to rise steadily towards $480 and $485.
Hourly MACD – The MACD for ETH/USD is slowly moving back into the bearish zone.
Hourly RSI – The RSI for ETH/USD is now well below the 50 level.
Major Support Level – $420
Major Resistance Level – $440