TA: Ethereum Corrects Sharply, What Could Spark Fresh Increase

Ethereum started a downside correction below $4,700 against the US Dollar. ETH is recovering, but it must clear $4,720 to start a fresh increase in the near term.

• Ethereum started a downside correction below the $4,750 and $4,650 levels.
• The price is now trading below $4,700 and the 100 hourly simple moving average.
• There was a break below a key bullish trend line with support near $4,720 on the hourly chart of ETH/USD (data feed via Kraken).
• The pair could start a fresh increase if it stays above the $4,500 support zone.

Ethereum Price Eyes Fresh Increase

Ethereum failed to settle above $4,700 level and started a fresh decline. ETH price declined below the $4,650 support level to move into a short-term bearish zone.

There was also a break below $4,550 and the 100 hourly simple moving average. However, the bulls appeared near the $4,450 support zone. Besides, there was a break below a key bullish trend line with support near $4,720 on the hourly chart of ETH/USD.

A low is formed near $4,452 and the pair is now recovering losses. It cleared the $4,500 resistance zone. Ether is now trading above the 23.6% Fib retracement level of the recent decline from the $4,866 high to $4,452 low. An initial resistance on the upside is near the $4,660 level.

The 50% Fib retracement level of the recent decline from the $4,866 high to $4,452 low is near the $4,660 level. The 100 hourly SMA is also near the $4,680 level. The next major resistance is near the $4,700 level.

Source: ETHUSD on TradingView.com

A close above the $4,700 level could spark a sharp increase in the near term. In the stated case, the price might rise towards the $4,850 level. Any more gains could lift the price towards the next key hurdle at $5,000.

Dips Limited in ETH?

If ethereum fails to continue higher above the $4,660 and $4,700 resistance levels, it could start a fresh downside correction. An initial support on the downside is near the $4,500 level.

The first key support is now forming near the $4,450 level and the recent low. A downside break below the $4,450 support might push the price below the $4,300 support. The next key support is near $4,200.

Technical Indicators

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

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

Major Support Level – $4,450

Major Resistance Level – $4,700