Ethereum Trims Gains, Why ETH Could Restart Its Rally

Ethereum failed to stay above $2,400 and started a major correction against the US Dollar. ETH price is now approaching the key $2,100 and $2,080 support levels

• Ethereum failed to gain pace above $2,400 and it started a downside correction.
• The price is now trading below $2,200 and the 100 hourly simple moving average.
• There was a break below a major bullish trend line with support near $2,200 on the hourly chart of ETH/USD (data feed via Kraken).
• The pair is likely to find a strong buying interest near the $2,100 and $2,000 support levels.

Ethereum Price Corrects Lower

Ethereum started a major upward move above the $2,000 resistance, similar to bitcoin. ETH price surged above the $2,250 resistance and the 100 hourly simple moving average.

However, the price faced a strong selling interest near the $2,400 and $2,450 levels. A high was formed near $2,431 before the price started a downside correction. There was a major decline below the $2,320 and $2,250 support levels.

The price even broke the 61.8% Fib retracement level of the upward move from the $2,110 swing low to $2,431 high. Besides, there was a break below a major bullish trend line with support near $2,200 on the hourly chart of ETH/USD.

Source: ETHUSD on TradingView.com

The price is now trading below $2,200 and the 100 hourly simple moving average. On the upside, an initial resistance is near the $2,200 level. The next major barrier for the bulls could be near the $2,250 level, followed by $2,300. A close above $2,300 could start a fresh rally in the near term.

Dips Limited in ETH?

If Ethereum fails to continue higher above $2,250 and $2,300, it could extend its decline. An initial support on the downside is near the $2,110 level.

The first major support is near the $2,080 level. The main support is now forming near the $2,040 level. It is near the 1.236 Fib extension level of the upward move from the $2,110 swing low to $2,431 high. Any more losses could set the pace for a drop towards the $2,000 support zone in the near term. The next major support sits near the $1,910 level.

Technical Indicators

Hourly MACD – The MACD for ETH/USD is now gaining pace in the bearish zone.

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

Major Support Level – $2,080

Major Resistance Level – $2,250