Ethereum Price Starts Downside Correction
Ethereum’s native token, Ether (ETH), started a downside correction from $4,770. The price is down nearly 15% and now approaches the key support at $3,900.
In the last analysis, we saw a decent increase in Ethereum above $4,000. We discussed the chances of more gains above $4,200. The bulls did push the price higher above the $4,500 resistance. Finally, it tested the $4,770 zone.
A high was formed at $4,770, and the price recently started a downside correction, like Bitcoin. ETH dipped below $4,500 and $4,350. There was a drop toward the 50% Fib retracement level of the upward move from the $3,361 swing low to the $4,770 high.
Ethereum is still above the $4,000 mark and the 50-day simple moving average. There is also a key bullish trend line forming with support at $3,800 on the daily chart.
Immediate support on the downside is $4,050. The first major area of interest for the bulls could be near the $3,900 level since it coincides with the 61.8% Fib retracement level of the upward move from the $3,361 swing low to the $4,770 high.
The next key level sits near the $3,800 level, the trend line, and the 50-day simple moving average. A daily close below $3,800 might spark a larger correction in Ethereum. In the stated case, the price could drop and retest $3,500.
If the bulls fail to protect $3,500, the bears might aim for a move toward $3,360, below which ETH price might even decline and test $3,200 in the coming days.
Another Increase In ETH From Support?
If Ethereum stays above the trend line, there might be a fresh increase. On the upside, the price is facing hurdles near the $4,350 level. The first major resistance sits near the $4,400 zone. If there is a clear move above $4,400 resistance, the price could drift toward $4,500.
A daily close above $4,500 may perhaps open the doors for a retest of the $4,770 high. Any more gains above $4,770 level could set the pace for a move toward $4,880 level and a new all-time high. The next key resistance could be near the $5,000 handle.
Overall, the Ethereum price is correcting gains below $4,500 and $4,400. If the bulls remain active, they could soon aim for a fresh increase from $3,900 or $3,800. If not, there could be more losses toward $3,360.