A bearish reversal from the new descending trendline on May 4 indicates that the traders continue selling on minor pullbacks. The ongoing correction had recently breached the $2800 support and challenged the lower support level of $2500. Thus, if coin holders lose this support, the Ethereum(ETH) price may plunge to January bottom support of $2300
Key points:
- The ETH traders are responding to the descending trendline
- The straight four days freefall in Ether registers a 13.75% fall
- The intraday trading volume in Ether is $19.4 Billion, indicating a 37% hike.
Source- Tradingview
Facing a bearish attack in the early days of April, the (Ethereum)ETH prices took a turnaround from the $3500 mark with an evening star pattern. Therefore, the bearish trend has decreased the market value of the Ether price by 28% in the last month.
The deflation breaks below the $3000 mark and approaches the next psychological support of $2500. Furthermore, the increasing trend momentum evident by the rise in trading volume over the week, bolster the $2500 fallout.
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Anyhow, the short-term correction continues under the influence of a resistance trendline, and the solid demand at $2500 holds a high possibility of a bullish reversal to the trendline.
If buyers fail to control the selling pressure, a downfall below the $2500 support zone will dump the ETH price to the next horizontal level at $2300.
Under ideal bullish conditions, the reversal rally will hit the resistance trendline after surpassing the $2750 mark.
Technical Indicator
The fast-moving downtrend is facing constant resistance from the 20 DMA. Moreover, the recent bearish crossover of the 20 and 100 may promote a $2500 fallout.
The expanding gap between the MACD and signal lines accentuates aggressive selling from the traders.
However, despite a steady downfall in price action, the daily-RSI following a sideways path indicates weakness in the bearish momentum. This bullish divergence hints at a reversal possibility in upcoming sessions.
- Resistance levels: $2730 and $3000
- Support levels: $2500 and $2300
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