- Ethereum embraced support at $380 after a rejection from $400.
- ETH/USD must continue to hold onto the 200 SMA support; otherwise, losses could extend to $340.
Ethereum approached $400 over the weekend but made little progress on Monday, leaving bears to take control over the price. The smart contract token plunged to $380 in an engulfing candlestick. Buyers in this zone managed to cushion the largest altcoin from dropping further. However, recovery is still limited, with Ether teetering at $384 at the time of writing.
Ethereum could refresh support at $340
A parallel descending channel on the 4-hour chart refused to confirm a bull flag pattern, which means that the downward momentum is far from over. On the upside, ETH/USD will face a challenging resistance highlighted by a confluence created by the 50 Simple Moving Average and the 100 SMA. Also, the channel’s upper boundary must be broken for a significant reversal to come into the picture.
The Relative Strength Index stresses the downward momentum was gaining traction amid the struggle to hold above the midline. If it continues to grind towards the oversold, sell orders will increase, and pull Ethereum under $380.
ETH/USD 4-hour chart
Bulls must then defend the tentative 200 SMA support as if their lives depended on it. Otherwise, declines might refresh the primary support between $350 and $340. A break under the channel’s lower boundary will also add credence to the bearish outlook.
The bearish narrative could be invalidated on the upside if Ethereum rises above the 100 SMA and 50 SMA. Sustained gains above the channel will also support the bullish case, while trading past $400 will encourage more buyers to join the market as the fear of losing out (FOMO) returns.
Ethereum Intraday Levels
Spot rate: $384
Relative change: 0.6
Percentage change: 0.16%
Trend: Bearish bias