Ethereum has experienced a sharp correction from its resistance level at $1,670 against the US Dollar. If it breaks the crucial support level at $1,600, ETH could face a significant downturn.
The bearish wave for Ethereum began at the $1,660 resistance, causing the price to drop below $1,640 and the 100-hourly Simple Moving Average. On the hourly chart of ETH/USD provided by Kraken, a key bearish trendline is forming around the $1,640 resistance level.
To regain an upward momentum in the short term, it is crucial for Ethereum to remain above the support zone at $1,600. Failure to do so could lead to further declines.
Unfortunately, Ethereum was unable to surpass the resistance levels at $1,660 and $1,670. Consequently, it started another decline, falling below the $1,630 support level, just like Bitcoin. The price further dropped below $1,620, but buyers were active near the $1,600 level. A low was established around $1,606, prompting the price to consolidate losses. Currently, Ethereum is trading near the 23.6% Fib retracement level of the downward move from the $1,659 swing high to the $1,606 low.
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Moreover, Ethereum is now trading below $1,640 and the 100-hourly Simple Moving Average. The bearish trendline near the $1,640 resistance remains a significant obstacle for price recovery.
Looking at the upside, Ethereum may face resistance at the $1,630 level and the 100-hourly Simple Moving Average. The next hurdle is anticipated at the $1,640 level, along with the aforementioned trendline. This trendline is also near the 61.8% Fib retracement level of the downward move from the $1,659 swing high to the $1,606 low.
In order for Ethereum to experience a substantial upward movement, it must surpass the main resistance level at $1,660. A successful break above this level could potentially send the price towards the $1,720 resistance, followed by a major barrier at $1,750. Breaking through this level may propel Ethereum further higher towards $1,820.
However, if Ethereum fails to surpass the $1,640 resistance, it may be vulnerable to another decline. The initial support on the downside lies around the $1,600 level. A break below $1,600 could accelerate losses and bring the price to the next key support level at approximately $1,540. If this level fails to hold, the price could potentially test the $1,500 level, with the next key support situated at $1,440.
In terms of technical indicators, the hourly MACD for ETH/USD is indicating a loss of momentum in the bearish zone. Additionally, the hourly RSI has fallen below the 50 level, suggesting a bearish sentiment.
To summarize, Ethereum experienced a correction from its resistance level and is now trading below crucial support levels. The price must remain above $1,600 to initiate an upward movement. Failure to maintain this support level could result in further losses, with the next significant support levels at $1,540 and $1,500. Traders should closely monitor the $1,640 resistance, as a breakthrough could lead to higher price targets.
