The weekend curse appeared to be continuing as the global bitcoin market began in the red on another Saturday. Ethereum was no exception to the trend, as it was subjected to selling pressure. At the time of publication, the world’s largest altcoin was trading at $2,227, down 4% in the previous 24 hours.
Ethereum 1-day chart
Source: ETH/USD, TradingView
After the price was rejected at the 20-SMA (red) and $2,540 resistance, Ethereum’s daily chart showed an ascending triangle breakdown. A southward trend proceeded, with losses totalling more than 13% from the pattern’s bottom trendline. The second question was, at what level could ETH’s demise be supported?
One defensive possibility was the swing low of $2,080 on April 23. A rebound from this zone launched a 100 percent surge in late April, with the digital asset reaching its all-time high above $4,000. While a similar conclusion is improbable in a bad market, the line may still provide support.
Another support line was found farther down the chart around the swing low of $1,730 on May 23rd. The 200-SMA boosted this area even further (green). Once ETH has found its footing, the emphasis will shift to specific resistance levels, but the bulls will face an uphill battle to break over $2,900.
Reasoning
Since the May 19th fall, the Relative Strength Index has been unable to break above 50. This suggested that bears were still in control of market pricing, despite repeated attempts to rebound in recent weeks. Since June, the MACD has seen some turbulent movement, but it has yet to reach beyond equilibrium. Moreover, the On Balance Volume’s downtrend suggested that selling pressure was still dominant in the market.
While further loss was undoubtedly on the way, ETH’s support zones might help to reduce incoming selling pressure. However, the price would be restricted in the future. The 20-SMA was hovering at $2,540, and gains would most likely be limited below this level in the following days. Even if a breakout occurred, ETH does not appear to be ready to soar beyond $2,900 just yet.
Conclusion
Moving forwards, Ethereum is anticipated to find support in the $2,080-2,000 range. Should it be needed, a more robust kind of defence was available for $1,730. In the event of a bullish comeback, ETH may struggle to break above $2,540 in the next days, as bears remain in control.