- Ethereum tumbles from the recently traded yearly high at $489 and refreshes support at $370.
- Ethereum bulls start looking forward to a formidable recovery, especially with the falling wedge pattern in the picture.
The smart contract cryptocurrency has succumbed to the widespread selloff in the cryptocurrency market. The bearish wave was not selective this time, affecting both major and minor coins. Prior to the drop, ETH had climbed to new yearly highs ($489). The next key milestone was for Ether to bring down the seller congestion and set the price up for another chapter eyeing $1,000 before the year ends.
However, the losses from Wednesday have been grand in their own measure. Support at $420 held at first but on a retest, the bears extended their legs below $400. At the time of writing, Ethereum is trading at $382, following a shallow recovery from the primary support at $370.
Higher support, preferably at $380 is likely to encourage buyers to shift their focus to $500. According to the technical picture, the second-largest cryptocurrency is surrounded by sloths of bears. The Relative Strength Index (RSI) is diving into the oversold. The RSI is usually utilized in technical analysis to indicate how strong a trend is.
Similarly, the Moving Average Convergence Divergence (MACD) shows that recovery will not come easy. Besides, diving into the negative region, a bearish divergence from the MACD emphasizes the bullish grip on ETH.
On the flip side, a falling wedge pattern formed amid the selloff from the recent high gives hope that recovery above $400 is possible in the near term. Wedge patterns usually signal tentative reversals from extended price trends (in this case the fall from $489). A break above the pattern’s resistance could easily catapult Ethereum above $400 and if supported by proper trading volume, it could set Ether on the path back to $500.
For now, support above $380 is preferred but if the declines continue, $370 will come in handy. On the, upside, resistance is expected at $400, $420 (former support), and the Simple Moving Averages (the 50 SMA currently at $433 and the 100 SMA at $440).
ETH/USD 1-hour chart
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