ethereum has recently seen increased selling activity, breaking the 100-day moving average and causing a substantial drop towards the 200-day moving average.
However, the price is facing a major support region, which may possibly lead to a temporary period of consolidation correction in the medium term.
Technical analysis
By shayan
The daily chart
A close examination of the daily chart reveals that after an extended period of corrective pullbacks near the crucial 100-day moving average at $3,386, sellers finally gained control, leading to a break below this key MA.
Since this zone was filled with buying interest and demand, the breakout triggered a notable extended sell-off cascade, accelerating the bearish momentum. As a result, the price plummeted towards the substantial 200-day moving average at $3096 and broke it.
This price action clearly indicates a bearish sentiment in the market, with sellers dominating. However, ethereum is currently hovering around the crucial and decisive $3K support region and is expected to go through a period of consolidation before initiating its next major move. If a pullback to the broken 200-day moving average occurs, the continuation of the downtrend will become more likely.
The 4-hour chart
The 4-hour chart shows that after a period of sideways consolidation above the $3,300 support, the price eventually faced aggressive selling activity and broke this crucial support region. This breakout resulted in a notable impulsive downtrend, indicating a long squeeze event in the perpetual markets.
However, ethereum has reached the important support zone of $3,000, which had previously supported the price several times. This zone is likely to be filled with demand, which could stop bearish pressures in the short term.
Moreover, the RSI indicator has fallen below 30, indicating a possible short-term market correction before the next significant move. Therefore, a short-term consolidation is likely to occur, allowing the market to rest and regain momentum. In this scenario, the price range between the 0.5 and 0.618 Fibonacci levels will be the primary target for short-term corrective moves.
Analysis of feelings
By shayan
ethereum has recently seen a surge in selling activity, leading to a significant drop towards the critical $3K support zone.
Understanding the key factors behind this rejection is crucial to predicting upcoming price movements. The attached chart highlights potential sell-off zones within ethereum’s price action, providing valuable insights for smart investors’ medium-term strategies.
The chart indicates a notable liquidity pool below the crucial $3,000. This pool is filled with aggressive long position sell stop orders that contributed to a significant price surge in mid-May. If sellers push the price below the $3,000 support zone, a massive short squeeze of long positions is expected. This would trigger the sell stop orders, accelerating the bearish momentum. Traders should keep a close eye on the price action around the $3,000 support zone in the coming days to determine the direction of the cryptocurrency’s trend.
ethereum Price Analysis: eth Holds $3K But Is Another Drop Imminent? The post appeared first on CryptoPotato.