TA: Ethereum Corrects Gains, Here’s Why 100 SMA Is The Key for Fresh Increase

Ethereum failed to continue above $2,900 against the US Dollar. ETH price corrected gains and it is now trading near a major support at $2,640 and the 100 hourly SMA.

• Ethereum broke the $2,850 resistance, but it failed to gain pace above $2,900.
• The price is now testing the $2,650 support and the 100 hourly simple moving average.
• There was a break below a key bullish trend line with support at $2,750 on the hourly chart of ETH/USD (data feed via Kraken).
• The pair must stay above the 100 hourly SMA to avoid a drop towards the $2,380 support.

Ethereum Price Reaches Key Support

Ethereum extended its recovery wave above the $2,800 and $2,850 resistance levels. ETH even pushed above the $2,900 level and settled nicely above the 100 hourly simple moving average.

However, it failed to gain pace above $2,900. The bulls made two attempts to push the price above the $2,920 level, but they failed. The recent high was formed near $2,912 before the price started a downside correction.

Ether corrected lower below the $2,850 and $2,800 support levels. There was a break below a key bullish trend line with support at $2,750 on the hourly chart of ETH/USD. The pair even declined below the 23.6% Fib retracement level of the upward move from the $2,370 swing low to $2,912 high.

Ether price is now testing the $2,650 support and the 100 hourly simple moving average. It is close to the 50% Fib retracement level of the upward move from the $2,370 swing low to $2,912 high.

Source: ETHUSD on TradingView.com

On the upside, an immediate resistance is near the broken trend line at $2,800. The next major resistance is near the $2,900 level, above which the price could attempt a move towards the $3,000 resistance zone.

More Losses in ETH?

If Ethereum fails to continue higher above the $2,800 and $2,900 resistance levels, it could extend its decline. An initial support on the downside is near the $2,650 zone and the 100 hourly SMA.

A downside break below the 100 hourly SMA might spark a larger decline. The next key support is near the $2,380 level. Any more losses could lead the price towards the $2,185 support zone.

Technical Indicators

Hourly MACD – The MACD for ETH/USD is slowly losing pace in the bullish zone.

Hourly RSI – The RSI for ETH/USD is currently below the 50 level.

Major Support Level – $2,650

Major Resistance Level – $2,800

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