Ethereum Recovers 8%, But Here’s Why It Could Resume Its Decline
Ethereum found support near $310 and started an upside correction against the US Dollar. ETH price recovered 8%, but it is facing many hurdles near $360 and $370.
- Ethereum is up over 8% and it broke the $335 and $340 resistance levels.
- The price is still well below the $370 resistance and the 100 hourly simple moving average.
- There was a break above a key bearish trend line with resistance near $350 on the hourly chart of ETH/USD (data feed via Kraken).
- The pair could resume its decline if it fails to overcome the main $370 resistance zone.
Ethereum Price Facing Hurdles
After dropping below the $350 support, Ethereum extended its decline below the $335 support. ETH price even broke the $320 support and settled below the 100 hourly simple moving average.
A new monthly low is formed near $310 and ether recently started an upside correction (similar to bitcoin). There was a break above the $325 and $335 resistance levels. More importantly, there was a break above a key bearish trend line with resistance near $350 on the hourly chart of ETH/USD.
The pair surpassed the $350 resistance, but it faced hurdles near the $360 level (the previous support and now a major resistance). A high is formed near $360 and ether price is currently declining below $350. It broke the 23.6% Fib retracement level of the recent upward move from the $310 low to $360 swing high.
Ethereum price trades below $360. Source: TradingView.com
An initial support on the downside is near the $340 level. The first major support is near the $335 level. It is close to the 50% Fib retracement level of the recent upward move from the $310 low to $360 swing high.
To start a fresh increase, the price must break the $360 and $370 resistance levels. A successful close above $370 is must for a decent move towards the $400 barrier.
Fresh Decline in ETH?
If Ethereum fails to correct higher above the $360 and $370 resistance levels, it is likely to continue lower. An initial support on the downside is near the $335 level.
A downside break below $340 and $335 could spark a fresh decline. The next major support is near the $322 level, below which there is a risk of a breakdown below the $310 support level.
Hourly MACD – The MACD for ETH/USD is slowly gaining momentum in the bearish zone.
Hourly RSI – The RSI for ETH/USD is still well below the 50 level.
Major Support Level – $335
Major Resistance Level – $371