- Ethereum started a downside correction after it failed to stay above the $580 support.
- The price traded below the $550 support and the 100 hourly simple moving average.
- There was a break below a major declining channel with support near $565 on the hourly chart of ETH/USD (data feed via Kraken).
- The pair tested the $507 level and it seems like there are chances of more downsides.
Ethereum Price Corrects Lower
After forming a short-term top near the $620 level, Ethereum started a sharp downside correction. ETH settled below the $600 level and it failed to stay above the $580 support level.
A clear break below the $580 support level sparked a strong decline (similar to bitcoin). Ether price declined heavily below the $550 support and it even settled well below the 100 hourly simple moving average. There was also a break below a major declining channel with support near $565 on the hourly chart of ETH/USD.
The price declined below the $520 support and traded as low as $507. It is currently recovering higher and trading above the $525 level. Ether is testing the 23.6% Fib retracement level of the recent decline from the $605 swing high to $507 low.
Source: ETHUSD on TradingView.com
On the upside, there is a major resistance forming near the $550 and $555 levels. The 50% Fib retracement level of the recent decline from the $605 swing high to $507 low is also near the $555 level.
The main resistance is forming near the $580 level and the 100 hourly simple moving average (the recent breakdown zone). A successful close above the $580 level is must to move back into a positive zone.
More Losses in ETH?
If ethereum fails to recover above the $550 resistance, there could be more losses. The first major support is near the $515 level, below which the price could retest the $507 low.
The main support is near the $500 handle. A clear break below the $500 handle might start a substantial decrease. In the mentioned case, the price could even test $450.
Hourly MACD – The MACD for ETH/USD is now gaining momentum in the bearish zone.
Hourly RSI – The RSI for ETH/USD is now well below the 30 level.
Major Support Level – $500
Major Resistance Level – $550