Ethereum, the second-largest cryptocurrency by market capitalization, experienced a downward correction, its price dipping to touch the support level at $1,935. This price action has led analysts to believe that Ethereum could be carving out a double-bottom pattern, suggesting a potential for an upcoming rally.
The dip came after Ethereum faced a rejection around the $2,090 mark, initiating a sell-off that saw the digital currency plunge beneath several key support levels, including the critical $2,020 threshold, lowering it into a bearish zone akin to that of Bitcoin’s recent performance.
A particularly notable technical development was the break below a significant contracting triangle on the hourly chart of the ETH/USD pair, captured via Kraken’s data feed. Nevertheless, buyers emerged with conviction around the $1,935 support, seeming to stabilize the drop and hinting at a robust foundation forming at this level. Analysts are now monitoring this for signs of a double-bottom formation, which contrasts sharply with Bitcoin’s chart, where a double-top pattern seems to be developing around the $38,000 price point.
Presently, Ethereum is fluctuating above the 23.6% Fibonacci retracement level of the last downward sweep from a high of $2,092 down to the recent low of $1,935. The cryptocurrency faces immediate resistance near the $2,000 mark.
More formidable resistance lies ahead at about $2,020, aligning with the 100-hourly Simple Moving Average and the 61.8% Fibonacci retracement level of the aforementioned decline. A decisive march past the $2,020 resistance zone could trigger a more robust ascent.
On the upside, should Ethereum gain enough momentum to overcome subsequent resistances, the next could be at $2,090. Success here could pave the way to an advance toward the $2,120 level, with further triumph potentially leading to a push toward the $2,200 echelon.
Conversely, if bulls fail to thrust the price above the $2,020 resistance, Ethereum could find itself on a downward trajectory once more. Immediate support in such a situation lies near $1,950, followed closely by the pivotal $1,935 level.
The most critical support hovers around $1,920, and should a breach occur below this, the market could brace for a steadfast decline, potentially dragging Ethereum down to the next firm footing around $1,850, with further losses possibly extending towards the $1,800 territory.
Several technical indicators hint at the market’s hesitation. The Hourly Moving Average Convergence Divergence (MACD) shows a waning bullish momentum within its zone. Moreover, the Relative Strength Index (RSI) for ETH/USD is now lodging below a neutral 50 level, signaling a potential growing sentiment of uncertainty.
Despite the current challenges, the areas to watch remain clear: major supports at $1,935 and major resistance at $2,020. The outcome at these junctures could dictate the short-term directional bias for Ethereum in the coming sessions.