TA: Ethereum Trims Gains, Why $2,500 Is The Key For Fresh Rally

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Ethereum corrected gains from the $2,640 zone against the US Dollar. ETH price is now trading above a major support at $2,500 and the 100 hourly SMA.

  • Ethereum failed to clear $2,650 and started a downside correction.
  • The price is now trading above $2,500 and the 100 hourly simple moving average.
  • There is a key declining channel forming with resistance near $2,550 on the hourly chart of ETH/USD (data feed via Kraken).
  • The pair is likely to start a fresh increase as long as it is above the $2,500 level.

Ethereum Price Holding Key Support

Ethereum gained pace above the $2,600 resistance and extended its upward move. However, ETH failed to surpass the $2,650 resistance. A high was formed near $2,638 before it started a downside correction.

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There was a break below the $2,600 and $2,550 support levels. Ether price declined below the 50% Fib retracement level of the of the recent increase from the $2,461 swing low to $2,638 high. The price even traded below the $2,520 support.

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It is now trading above $2,500 and the 100 hourly simple moving average. It is holding the 76.4% Fib retracement level of the of the recent increase from the $2,461 swing low to $2,638 high.

Source: ETHUSD on TradingView.com

There is also a key declining channel forming with resistance near $2,550 on the hourly chart of ETH/USD. A clear upside break above the channel resistance and $2,550 might start a fresh rally. The next key resistance is near the $2,600 level. The main resistance is still near $2,640 and $2,650. Any more gains could open the doors for a larger increase towards $2,750.

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Downside Break in ETH?

If Ethereum fails to clear the $2,550 and $2,600 resistance levels, it could continue to move down. An initial support on the downside is near the $2,510 level.

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The first major support is near the $2,500 level and the 100 hourly SMA. A downside break below the 100 hourly SMA could push ether price towards the $2,450 support zone. Any more losses might clear the path for a drop towards the $2,400 level in the near term.

Technical Indicators

Hourly MACD The MACD for ETH/USD is now losing pace in the bearish zone.

Hourly RSI The RSI for ETH/USD is currently close to the 50 level.

Major Support Level – $2,500

Major Resistance Level – $2,550

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Author: Aayush Jindal


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