Today, the price of Ethereum (ETH) plunged above the psychological mark of $4,000 after a successful rally to a high of $4,160.
The cryptocurrency could have come out of a downward correction if buyers had broken above the $4,200 high. The bullish momentum may have extended to the earlier highs of $4,400 and $4,800.
Nonetheless, the largest altcoin has reached the overbought region of the market. Today, Ether has fallen lower and is approaching the low of $4,047 at the time of writing. The daily chart shows that the market will fall to the low of $3,907 if sellers break the 21-day moving average line. In other words, a break below support at $4,000 will create further selling pressure. On the other hand, if the current support holds, Ethereum will fluctuate between the 21-day moving average and the 50-day moving average in a trading range.
Ethereum indicator analysis
The cryptocurrency’s price bars are above the 21-day line SMA, but below the 50-day line SMA, indicating a possible move within the trading range. Ethereum is at level 48 on the Relative Strength Index for period 14, indicating that the altcoin is in the bearish trend zone. The market is above the 40% area of the daily stochastic. Ether is trying to continue its bullish move to the upside.
Major Resistance Levels – $4,500 and $5,000
Major Support Levels – $3,500 and $3,000
What is the next direction for Ethereum?
ETH/USD has been in a downtrend after rejecting the high at $4,160. The selling pressure could continue if Ether loses the $4,000 support. Meanwhile, the downtrend from December 24 has shown a candlestick testing the 50% Fibonacci retracement level. The retracement suggests that Ether will fall to the 2.0 Fibonacci extension level or the $3,907.72 price level.
Disclaimer. This analysis and forecast are the personal opinions of the author and are not a recommendation to buy or sell cryptocurrency and should not be viewed as an endorsement by CoinIdol. Readers should do their research before investing funds.
Source: Read Full Article