Ether (ETH) Tries to Reclaim the $2K Level Amid Merge Hype but Bulls Look Exhausted
Despite attempting to break above the $1,820 resistance zone, ETH price did not find an upside continuation. It stayed below the $1,850 resistance area where the price fell after it formed a high near $1,831 and broke below the support zone of $1,850. A low was also formed near $1767 and since, the price has managed to remain around the $1,750 support area.
Ethereum Price Tests Key Support
After rising above the $1,750 support level, Ether consolidates above the rising trend line and the 23.6% Fibonacci level. On the upside, resistance is around the $1,800 level, while support is around the $1,767 low. A break below this level could trigger a decline to the next support level at $1,731. The trend line formed from the high of $1,831 to the low of $1,767 is also close to the 50% Fib level.
The next major resistance level is around $1,820, which is a 50% Fibonacci level. A clear break above this level could trigger a strong increase. The main resistance level is also near the $1,850 level.
Analysts expect that the price of Ether will fall further as a technical pattern begins to emerge on its chart. It could indicate that the cryptocurrency is in for more pain.
On the three-day chart, the price of Ether is showing signs of a potential death cross. This bearish indicator suggests that the cryptocurrency is in for more pain. The 50-day simple moving average is also moving south, and it looks like it could cross below the 200-day moving average by the end of the month.
Bearish ‘Death Cross’ Pattern Looms Over Ethereum
According to a technical analysis theory, a death cross indicates accelerated selling that could lead to a long-term decline. The death cross on the three-day chart is the second time in seven years that the price of Ether has dropped below its 200-day moving average. The first time it happened was in October 2018 and caused the price of Ether to plummet by 60%.
Although the death cross is expected to cause a significant decline in the price of Ether, it is not a guarantee that the cryptocurrency will go down further. The death cross pattern is a lagging indicator that shows the asset’s decline after reaching its peak. It occurs when the moving averages fall below the 200-day moving average.
The price of Ether is currently around $1740, which is significantly lower than its November high of $4,868. The native token of Ethereum has also lost 50% of its value this year.
Traders use the death cross formation to identify potential reversals higher. It shows that the asset’s decline is about to end. It remains to be seen if the death cross will encourage more selling or buying from trend-following investors.
Upcoming Ethereum Merge
Despite the market’s overall positive sentiment, the fundamentals of Ethereum remain mixed. The central bank’s aggressive monetary policy stance and the expected upgrade to a proof-of-stake design are some of the factors expected to drive the price of Ether higher.
On Wednesday, the developers of Ethereum successfully merged the proof-of-work and proof-of-stake chains of its oldest test network, known as the Ropsten. The recent merger between the mainnet and Ropsten will impact the price of Ether positively.
The Fed has raised interest rates by 75 basis points this year. The central bank will increase its monetary policy rate by another 50 basis points at its next meeting. If today’s consumer price report shows strong inflation, this will strengthen the case for a rate hike.
ETH Downside Break?
If ethereum fails to rise above the resistance of the current price of around $1,820, it could continue to move down. On the downside, support is at the $1,765 area.
The next major support is around the $1,720 level. A break below this area could trigger a major decline. If the price gets close to the support, it could move towards the next support zone around the $1,650 level.
