The recent surge in the crypto market has led to a pullback, with Bitcoin hitting a new all-time high. However, Ethereum (ETH) is also experiencing a downward trend after reaching a yearly high of $4,094. The price of Ethereum has been moving below the 100-day Moving Average (MA) in the 1-hour and 4-hour timeframes, raising questions about its future direction.
Technical Analysis
Looking at the current price of Ethereum, which is around $3,360 at the time of writing, there are clear support and resistance levels identified. A support level of $3,067 and resistance levels of $3,681 and $3,591 have been established. Further movements in the price could lead to the creation of new support and resistance levels.
4-Hour Moving Average
A closer look at the 4-hour timeframe reveals that Ethereum’s price is trending below the 100-day moving average, indicating a potential downtrend in the near future. This pattern suggests that the price could continue moving downward.
Using the Relative Strength Index (RSI) indicator, it is evident that the RSI signal line is below the 50 line, signaling a downward trend in the price of Ethereum. This further supports the notion that the price may continue to decline.
Examining the MACD indicator in the 4-hour timeframe, it is noticeable that the MACD histogram has dropped below the zero line. Additionally, both the MACD line and the signal line have crossed below the zero line, indicating a bearish outlook for the price of Ethereum.
If the price of Ethereum breaks below the support level of $3,067, there is a possibility of further downward movement to establish a new support level. However, failure to break below this support level could lead to a price reversal and the initiation of an upward trend. Breaking above the resistance levels of $3,681 and $3,591 could pave the way for a bullish run.
The current state of Ethereum presents a mixed outlook with indications of a potential downtrend in the short term. However, there are also possibilities of a price reversal and an upward movement if certain support and resistance levels are breached. It is essential for investors to conduct their own research and exercise caution when making investment decisions in the volatile crypto market.
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