• Ethereum’s price dropped significantly yesterday after multiple weeks of rising, causing investors to question the validity of the recent positive sentiment.
• On the daily chart, the price has yet to reach the $2200 resistance, but the $2000 psychological level was defended by bears.
• On the 4-hour chart, things do not look much better for ETH, as the price has broken below a large ascending channel.
Ethereum Price Drops Below $2K
Ethereum’s price dropped significantly yesterday after multiple weeks of rising, causing investors to question whether this augured a bearish continuation in prices.
Daily Chart Analysis
On looking at the daily chart, it was evident that Ethereum had yet to breach $2200 resistance and its $2000 psychological level was well defended by bears. The RSI indicator also gave an indication of an impending pullback or reversal. Currently, Ethereum could rely on support from both $1800 and its 50-day moving average which is currently trending around the same price mark. If bullish momentum were to continue and successfully break through both these resistances then a rally towards significant resistance at $3000 would be highly probable.
4-Hour Chart Analysis
The 4-hour chart paints an even gloomier picture with Ethereum having broken below a large ascending channel. The minor resistance at $1930 is holding up against further drops but if this fails then a further bearish outcome may follow. However if prices manage to climb back into their channel then bullish continuation higher could still be expected.
Investors are currently uncertain about where Ethereum will go next given its current market situation with bulls and bears appearing evenly matched in their fight for control of prices. A successful break out above both psychological levels at $2000 and technical resistance at $2200 could mean a successful rally towards significant resistance at $3000 while failure could see continued bearishness in prices with potential falls back down into previous channels or lows being possible scenarios.
Ultimately what direction Ethereum takes will depend on how well bulls defend against potential bearish pressure in order to maintain current gains or break out higher in search of more profits.