TA: Ethereum Trims Gains, Here’s What Could Trigger Larger Decline

Ethereum traded to a new all-time high above $4,200 before correcting lower against the US Dollar. ETH price is now trading well below $4,000, with a few bearish signs.

  • Ethereum extended its rally above $4,000 and it traded to a new all-time high near $4,215.
  • The price is now correcting below $4,000 and testing the 100 hourly simple moving average.
  • There was a break below a key bullish trend line with support near $3,980 on the hourly chart of ETH/USD (data feed via Kraken).
  • The pair is likely to continue lower towards the $3,600 and $3,500 support levels.

Ethereum Price Corrects Lower

Ethereum extended its upward move after it broke the $4,000 resistance zone. ETH price even cleared the $4,150 resistance and $4,200. It traded to a new all-time high near $4,215 before starting a sharp downside correction.

There was a break below the $4,100 and $4,000 support levels. Ether declined heavily below $4,000 and the 100 hourly simple moving average. There was also a break below a key bullish trend line with support near $3,980 on the hourly chart of ETH/USD.

The pair spiked below the $3,600 support on Kraken and it traded as low as $3,501. It is now recovering losses and trading above the $3,800 level. There was a break above the 23.6% Fib retracement level of the recent drop from the $4,213 high to $3,501 low.

Ethereum Price

Source: ETHUSD on TradingView.com

On the upside, the price is facing hurdles near the $3,850 and $3,900 levels. The 50% Fib retracement level of the recent drop from the $4,213 high to $3,501 low is also near $3,860. The main resistance sits at $3,940, above which the price is likely to climb steadily towards the recent all-time high. An intermediate resistance could be near the $4,120 level.

Dips Limited in ETH?

If Ethereum fails to continue higher towards $4,000, it could start another downside correction. An initial support on the downside is near the $3,750 level.

The first key support is near the $3,680 level. The main support is now forming near the $3,600 level. If there is a downside break below the $3,600 zone, the pair could dive towards the $3,300 support.

Technical Indicators

Hourly MACDThe MACD for ETH/USD is now losing momentum in the bearish zone.

Hourly RSIThe RSI for ETH/USD is well below the 50 level.

Major Support Level – $3,680

Major Resistance Level – $3,950

Publication date: 
05/11/2021 - 08:08
Author: 
Disclaimer

The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.