Ethereum's Stalled Rally: A Deeper Correction on the Horizon?
Ethereum (ETH) has recently seen its upward momentum falter, failing to sustain gains above the crucial $4,750 mark. The cryptocurrency is now in a consolidation phase, struggling to reclaim higher price points and facing the prospect of a more significant downward correction in the near term.
Price Action and Key Resistances
After briefly extending gains above $4,600 and $4,620, even testing the $4,750 resistance zone, ETH experienced a sharp decline as bears took control. This downturn led to a break below significant support levels, including $4,620 and $4,600. A critical bullish trend line at $4,560 on the hourly chart was also breached, indicating a shift in market sentiment. The price further tested the $4,440 zone and is currently consolidating losses below $4,550 and the 100-hourly Simple Moving Average.
Upside Potential and Resistance Levels
Should Ethereum manage to reverse its current trajectory, immediate resistance is expected around the $4,520 level. A more substantial challenge lies at $4,550, correlating with the 23.6% Fib retracement level of the recent decline from the $4,759 swing high to $4,435 low. The primary resistance is positioned near $4,600, which also aligns with the 50% Fib retracement. A clear break and sustained move above $4,600 could propel ETH towards the $4,650 resistance. Further bullish momentum might push the price to the $4,720 and potentially $4,750 resistance zones.
Downside Risks and Support Zones
Conversely, if Ethereum fails to overcome the $4,600 resistance, a fresh wave of declines could ensue. Initial downside support is found near $4,440, with the first major support sitting at $4,420. A definitive break below this $4,420 support level could trigger a more pronounced bearish movement, potentially pushing the price towards $4,320. In a more severe downturn, ETH could even drop to the $4,250 region in the near term, with the next key support at $4,150. Technical indicators underscore this bearish outlook, with the Hourly MACD losing momentum in the bullish zone and the Hourly RSI positioned below the 50 mark.
