Key Takeaways:
- Ethereum started another decline after it struggled near $3,640.
- ETH/USD is now testing a connecting bullish trend line with support at $3,325 on the daily chart.
- The price must stay above the 50-day simple moving average (blue) to start a fresh increase.
Ethereum (ETH) is showing a few bearish signs from $3,640. However, ETH could recover if there is no daily close below the 50-DSMA.
Ethereum Price Reaches Key Support
This past month, we saw a bearish reaction in Ethereum from the $4,082 high. ETH declined below the $3,880 and $3,750 support levels. There was a move below the 23.6% Fib retracement level of the key increase from the $2,172 swing low to the $4,082 high.
A sharp decline was below $3,200, but the bulls were active above the $3,000 support. More importantly, Ether stayed above the 50-day simple moving average (blue).
Ethereum recovered losses and climbed above the $3,550 level. However, the bears were active near the $3,640 zone. The price again moves below the $3,550 level, like Bitcoin below $68,000. It is now testing a connecting bullish trend line with support at $3,325 on the daily chart.
The bears seem to attempt a daily close below the 50-day simple moving average (blue). If there is a daily close below the trend line support and the 50-DSMA, there could be a continuation of the downside.
The first major support below the trend line sits at $3,120. The next key support is near the $2,900 level. It coincides with the key increase’s 61.8% Fib retracement level from the $2,172 swing low to the $4,082 high.
A downside break and a daily close below the $2,900 support could increase selling pressure. In the stated case, ETH could decline toward the $2,620 support level in the coming days.
Fresh Increase In ETH?
Conversely, Ethereum bulls might manage to protect losses below the trend line support. The price might recover and test the $3,500 resistance in the stated case. The first major resistance is visible near the $3,640 level.
A clear move above the $3,640 resistance could send Ether higher. The next major resistance is $3,800. If the bulls clear this resistance, the price could resume its uptrend and rise toward the $4,080 resistance in the near term.
Overall, Ethereum’s price is approaching crucial support at $3,35, which is 50-DSMA. ETH must stay above the $3,325 support to avoid a larger decline.
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