Ethereum (ETH) Must Pass Crucial Test and Hold Above $2,200 Support

Ethereum’s trajectory has taken a downward turn

The weekly timeframe reveals ETH’s ascent along an upward support line since July has been lost. The most recent rebound from this trend line occurred in October 2023 (green icon), and it spurred accelerated growth.

This subsequent upward movement resulted in a breakout of the horizontal range in November. Apart from the deviation in April (red circle), this range has oscillated between support and resistance for nearly 1,000 days.

After the bullish breakout, ETH soared to a peak of $2,717 on January 11. However, the price has since plummeted and is now forming a bearish candle on the weekly timeframe.

Source: TradingView

The Weekly Relative Strength Index (RSI) is generating bearish signals. The indicator has formed a bearish divergence (green line) and is on a decline. This pattern arises when rising prices are accompanied by waning momentum, often heralding a trend reversal.

What experts are saying

Cryptocurrency analysts and traders on Platform X are uncertain about the coin’s future trend. InmortalCrypto predicts that Ethereum will experience a short-term decline, followed by a significant rise.

ETH/USDT weekly chart. Source: X

CryptoMichNL suggests that ETH will rally against Bitcoin (BTC). He stated:

“Momentum for $ETH will likely emerge in the next few weeks. Arguments: #Bitcoin hits bottom, this is a trigger for altcoins to make a new breakthrough; Hype around Ethereum spot ETF; Ethereum launches new upgrades to reduce costs by 90%.”

However, CredibleCrypto believes that the ETH/BTC pair has yet to hit rock bottom and will continue to decline.

ETH Forecast: Will Support Hold?

The daily timeframe is signaling bearishness.

On January 23, the price broke through the 95-day-old ascending support line. The daily RSI confirms this price breakthrough by simultaneously dropping below the 50 level (red icon).

Prior to this, the RSI had risen above 50 (green icon), coinciding with the formation of the aforementioned ascending trend line.

ETH is currently trading within the $2,200 horizontal support zone. If a breakdown occurs, the price could decline by almost 11% to the 0.618 Fibonacci retracement level at $1,980.

Source: TradingView

Despite this bearish outlook, a strong bounce from the $2,200 support area could trigger a 7% surge in Ethereum towards the ascending trendline at $2,400.

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