Ethereum sellers could force the prices to dip all the way to this key level

Ethereum sellers could force the prices to dip all the way to this key level

Bitcoin fell nearly 19% from the short-term range highs at $52k, and Ethereum has also registered a similar drop of around 23% from local highs at $4121. Ethereum buyers tried hard, but ultimately in vain, to climb past the $3800 area over the past week. This attempt was rebuffed on no uncertain terms, and Ethereum sank below yet another area of demand at $3300-$3400.

The $3800 area, and the $3770 support level, were important levels for Ethereum, but the price tanked hard through these levels in recent days. This was accompanied by Bitcoin breaking through beneath the short-term range lows at $45.8k.

In September 2021, Ethereum bounced between the $3157 and $2800 levels for a week and a half, before climbing upward once more. This was something that could repeat.

The 50% Fibonacci retracement level, based on an ETH move from $1706 to $4868, appeared to have been flipped from support to resistance. The demand area at $3300 (cyan box) was broken on heavy trading volume, and the bearish retest could see ETH sink.

The shorter-term Fib levels (white) presented $3136 and $2928 as extension levels where ETH could potentially halt this move downward. The $2928 level had confluence from the other set of retracement levels ($2913), as well as higher timeframe support at $2990 and $2823.

Rationale

The RSI sank below 20 the day prior to press time and formed a higher low a few hours earlier while the price made a lower low. This was not a bullish divergence as the time period between was 23 periods, exceeding 14.

The OBV was in a steady decline, confirming that selling volume was behind the move for ETH. The Supertrend indicator also showed a sell signal and indicated the $3300 area to be a place where good R: R shorts could likely be opened.

Conclusion

The cluster of significant levels in the $2800-$2900 area marked it as strong support for ETH. The flip of $3300 from demand to supply could occur in the near term, and over the next couple of days, Ethereum could retest $3300 and sink toward $2800-$2900 in search of demand.

Source

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