- Ethereum price tanked 6% on Monday and started the week on the backfoot.
- ETH sees bulls stepping in at a vital moving average.
- The intersection area ahead creates an ideal moment for a break and leg up above $2,000.
Ethereum (ETH) price sees bulls coming in and scooping up some ETH at a nice discount. From a purely technical point of view, the decline in Ethereum price action makes sense as it was overheated since the beginning of April and a cooldown was needed. With traders eagerly buying around the 55-day Simple Moving Average (SMA), just one element is standing in between them and ETH popping back above $2,000.
Ethereum price proof that every athlete needs a cooldown
Ethereum price action on the 4-hour chart has a lot of comparisons with an athlete getting ready for the Olympics. After quite the staggering rally from March all the way up to mid-April, a cooldown was more than welcome. The Relative Strength Index (RSI) clearly indicated that bulls have been going in the red, and the RSI started to show signs of overwrought buying.
ETH taking a step back was no surprise, certainly with all the turmoil regarding legal replications in court rulings. The 55-day SMA has proven to be very important on April 27 and March 16– two dates when it provided ample support and a reboot to the rally. One hurdle stands in the way of bulls, and that is around $1,930, where the current cap and a pivot level fall in line. A break above would offer room to rally toward $2,150.
ETH/USD 4H-chart
One could argue if the global market turmoil has any impact on cryptocurrencies. Considering that First Republic Bank had to be bailed out on Monday and that U.S. Treasury Secretary Janet Yellen warned that the debt ceiling would be hit by June 1st, one can imagine that current market conditions are unfavorable for risk on a trade. Expect to see possible another leg lower to find better support near $1,688. This means still another 10% decline.
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