- ETH retraces -33% from highs of $2040
- ETH fails to hold support of $1550
- Price is currently holding 3 month trend
Ethereum , the second largest cryptocurrency has experienced a -30% decline off ATH of $2040 that was set on February 20th. The sentiment was very bullish and then quickly turned bearish as ETH shattered many major support zones.
In bull markets, -30% declines are normal for continued healthy growth. As of now, ETH is still considered to be in a bull market. If major support of $1372 cannot held and that area becomes resistance, I would believe it can be time to worry that ETH and the rest of the cryptocurrency markets are entering a multi-month bear trend.
Ethereum Weekly chart
ETH has been holding an uptrend line (black diagonal) that started at the beginning of 2021. The price has shown respect to this line 10 times now, always bouncing off strongly confirming it is a support.
Inversely, if the price breaks under the black diagonal trend coupled with the major support area of $1372, ETH risks another large fall as well as breaking important uptrend structure needed in a bull market.
While looking at the Stochastic RSI , we can see that it has reset to a low that is not seen on this current chart view. The last time the blue MA of the Stochastic RSI reached this low of levels is June of 2020. That is almost 8 months ago! This can signal one of two things:
- Investors are now taking a bearish view on ETH, expecting a larger downfall in the near future as strength sits very low signaling there are not many buyers at this level.
- After growing almost 400% without much retracement, ETH needed to shakeout the sellers and reset its strength at a higher price level. This would signal a hard bounce to soon occur as Ethereum “refueled its tank.”
#2 is the standpoint I would like to agree with as of now. The stochastic RSI reseting this low coupled with the 2 month trend line bounce can produce a revival to at least levels of $1600.