Ethereum, like Bitcoin, was subjected to some intense volatility this morning
The cryptocurrency’s price rallied as high as $244 before posting a swift rejection that sent it reeling down to $236
Bulls are now trying to stabilize it around $238, although this move does appear to have struck a blow to ETH’s technical strength
How it trends in the days and weeks ahead could be influenced by today’s movements if buyers are unable to continue supporting its price above $238
One trader is now pointing to a critical trendline that ETH has been failing to surmount, noting that its inability to break this level could prove to be dire
Ethereum has seen relatively lackluster price action in recent times, as it has continued hovering between its wide trading range between $230 and $250.
Although earlier in the week ETH did attempt to break above this range’s upper boundary, its buyers lacked the strength required to do so. This movement was followed by a slight selloff.
Today, bulls once again attempted to catalyze some upwards momentum, but they were met with a sharp influx of selling pressure that caused ETH’s price to hit a critical support level.
This support – which sits at $238 – could be highly influential for the crypto’s mid-term price action.
A decline beneath this level could lead to notable losses.
Ethereum Hits Key Support Following Failed Rally Attempt
At the time of writing, Ethereum is trading down roughly 1% at its current price of $237.
Earlier this morning, the cryptocurrency rallied all the way up to highs of $244, although it almost instantly faced a brutal selloff after tapping these highs.
From here, sellers forced it below $237, although it has since found some support.
As Bitcoinist reported yesterday, $238 is a crucial level that Ethereum’s buyers must defend, as one analyst cited within the report noted that a decline beneath this level could cause ETH to set lower lows.
The analyst explained:
“Currently PA is testing $238 which previously was a strong level of resistance… this is super critical for bulls to hold. If we break down from here likely we see a lower low.”
ETH Struggles to Surmount Massive Descending Trendline
Throughout the past year, Ethereum has been struck below a descending trendline.
One analyst pointed to this formation, explaining in his chart that if it breaks this level, it would be the “most significant ETH breakout since the bubble ended in 2018.”
That being said, each attempt to move over this level has resulted in selloffs, as seen below.
Image Courtesy of Lucid. Chart via TradingView.
The analyst also notes that a break below the red line – as seen on the above chart – could cause a prolonged bout of bearishness.
Featured image from Shutterstock.
Charts from TradingView.