Ethereum has experienced a significant price drop of over 10%, following in the footsteps of Bitcoin. However, despite this setback, the bulls remain active and are now focusing their efforts on the $3,350 support zone.
Initially, Ethereum rallied towards a multi-month high above $3,800, following Bitcoin’s surge to a new all-time high above $69,000. However, the bears swiftly intervened, causing the price to crash by over $500 and trade near the $3,200 support level.
During this downturn, a key bullish trend line with support at $3,620 was broken. Nevertheless, Ethereum is currently attempting a fresh increase and has climbed above the $3,500 level. It is now trading near the 100-hourly Simple Moving Average.
To regain bullish momentum, Ethereum must overcome the immediate resistance at around $3,550. The next significant resistance levels are $3,600 and $3,680, representing the 61.8% Fibonacci retracement level. If these resistance levels are surpassed, there is potential for a rally towards the $3,820 and $3,950 resistances. Further gains could even bring the price closer to testing the $4,000 mark.
However, if Ethereum fails to clear the $3,600 resistance, a downside correction may ensue. Initial support is seen around the $3,440 level, followed by major support at $3,400 and the $3,340 zone. Should the price continue to decline, it may test the $3,220 and $3,120 levels.
Looking at the technical indicators, the MACD for ETH/USD is showing a loss of momentum in the bullish zone, while the hourly RSI is now below the 50 level.
In summary, despite the recent drop, the bulls are not yet finished as they focus on the $3,350 support level. If they can overcome the resistance levels, Ethereum has the potential for further gains. However, a failure to do so could lead to further losses in the near term.