The correction rally in ETH price had made a new lower low of $3300 mark. Reaching this support, the price had discounted by around 38%, where it obtained strong demand pressure. The price action and indicators have started taking a positive turn, preparing for a new rally.
Key technical points:
- The daily RSI Slope crossed above the 20-SMA
- The 24-hour trading volume in the Ethereum coin is $16.4 billion, indicating a 2.17% loss
Previously when we covered an article on Ethereum coin, the pair gave a bearish breakdown from the 50% retracement level support($3300). The price provided a retest in the lower time frame chart, and as warned plunged to $2900.
This bottom level coincides with the 0.618 Fibonacci retracement level and provided strong support to the price. The chart showed a few lower price rejection candles at this support before bouncing off with a bullish engulfing candle on January 11th.
Even though the price action shows recovery signs, the coin still has to face a crucial resistance of 200 SMA. The price would soon retest this EMA line to validate if the coin can start a new rally or not.
The daily Relative Strength Index (41) shows significant recovery compared to the price action. Moreover, the RSI slope has also reclaimed the 20-SMA line.
ETH Price Forms A Rounding Bottom Pattern
The ETH price has bounced from the $2900 support. The coin is currently trading at the $3364 mark, indicating a 12.74% gain from the bottom support. This minor recovery displays the formation of a rounding bottom pattern in the 4-hour time frame chart.
Following this pattern, the coin price should rise to the overhead resistance neckline of $3900, with the hope of starting a new rally. As for now, the price has breached a minor resistance level of $3300, providing an entry opportunity for long traders.
The Moving average convergence divergence shows the MACD and signal lines are on the verge of crossing above the neutral line, indicating increasing bullish momentum.
- Resistance levels- $3450 and $3365
- Support levels- $3300 and $2900.