Ethereum Price Forecast: ETH causes mayhem amid sharp drop under $4,000

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Ethereum surprised many in the cryptocurrency market when it rallied above $4,000. It was song and dance for investors who have been patient with the pioneer smart contract token. An all-time high was formed at $4,216, allowing bulls to shift the focus to $5,000. However, the bullish momentum began fizzling out, leaving ETH with few options.

A correction ensued, forcing Ethereum to slide beneath $4,000. At the time of writing, the flagship cryptocurrency teeters at $3,790 amid an ongoing retreat. The reversal may continue in the near term based on the short-term technical levels.

Ethereum begins the hunt for higher support

The Moving Average Convergence Divergence (MACD) shines a light on the worsening technical picture. After rallying to 186, the indicator is dropping toward the mean line. Moreover, the MACD line (blue) has crossed under the signal line, insinuating that bears are in control and it was a possible time to sell the top.

ETH/USD four-hour chart

ETH/USD price chart
ETH/USD price chart by Tradingview

The Relative Strength Index (RSI) in the same four-hour chart also shows that Ethereum’s gravitational pull is more robust than the bullish advances at the time of writing. A continuous movement toward the oversold region would call more sellers into the market as investors rush to take profits.

The hunt for higher support is in full force, especially with the zone at $3,800 broken. The following tentative anchor area is highlighted at $3,500 by the 50 Simple Moving Average (SMA).

Ethereum intraday levels

Spot rate: $3,790

Trend: Bearish

Volatility: High

Support: $3,500 and $3,100

Resistance: $3,800 and $4,000

John is a talented writer with over two years of experience actively contributing to the cryptocurrency industry by providing credible, interesting and easy to read the content. His main focus is on cryptocurrency price analysis and industry news coverage. Lets follow him on Twitter at @jjisige
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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