Ethereum (ETH) is showing signs of weakness as the second-largest cryptocurrency faces a crucial support test at $2,650. Technical analysis reveals multiple bearish indicators that could signal further downside in the short term, as recent predictions of a $4,000 breakout face their first major challenge.
Key Technical Levels Under Pressure
The latest price action shows ETH encountering significant resistance after reaching a local high of $2,787. Critical developments include:
- Break below the 100-hourly Simple Moving Average
- Violation of key bullish trend line at $2,625
- Price trading below 50% Fibonacci retracement level
- RSI dropping below the crucial 50 zone
Support and Resistance Zones
Traders should monitor these critical price levels:
| Type | Level | Significance |
|---|---|---|
| Major Support | $2,550 | Critical floor price |
| Immediate Support | $2,600 | Short-term bounce level |
| Key Resistance | $2,720 | Near-term ceiling |
| Major Resistance | $2,780 | Previous local high |
Technical Indicators Signal Caution
Multiple technical indicators suggest increased bearish pressure:
- MACD showing growing momentum in bearish territory
- RSI trending below 50, indicating weakening buying pressure
- Break of key trend line support at $2,625
Potential Price Scenarios
Two primary scenarios are emerging:
Bearish Case
- Break below $2,550 could trigger cascade to $2,500
- Extended downside targets $2,440 and $2,400
- 76.4% Fibonacci retracement level acting as last defense
Bullish Case
- Recovery above $2,720 could signal trend reversal
- Break of $2,780 resistance opens path to $2,880
- Potential extension to $2,950 if momentum builds
FAQ
What’s causing Ethereum’s current price correction?
The correction appears technical in nature, following a rejection at the $2,780 resistance level and breakdown of key support structures.
Where is the strongest support level for ETH?
The $2,550 zone represents the strongest support, coinciding with the 76.4% Fibonacci retracement level.
What needs to happen for ETH to resume its uptrend?
A decisive break above $2,720 with strong volume would signal potential trend reversal and continuation of the upward movement.
Time to Read: 4 minutes
