- Ethereum hovers above a key support level
- Profit-taking put a stop to the recent rally
- Momentum indicators could turn bearish soon
Ethereum has benefited from Trump’s win, reaching a four-month high, but it failed to close above the 3,500 level and thus remains quite far from its March 2024 high. The 20% post-US election rally triggered some profit-taking, pushing ethereum lower towards the 3,114 area. The short-term trend, though, remains bullish.
Meanwhile, the momentum indicators could be close to turning bearish. The RSI is edging lower, thus pointing to weaker bullish pressure in ethereum. Interestingly, the stochastic oscillator has dropped below both its overbought area (OB) and moving average. Should the stochastic oscillator fail to return inside the OB area, and instead it resumes its descent, it would be seen as a strong bearish signal.
Should the bulls remain confident, they would try to keep ethereum above the 38.2% Fibonacci retracement level of the October 13, 2023 – March 12, 2024 uptrend at 3,115, and then gradually push its towards the 3,490 level. If successful, and assuming that the April 2022 high at 3,582 is easily surmounted, the path could then be open for a move towards the 4,000 area.
On the other hand, the bears will try to regain the upper hand. A move below 3,115 could be the first step of a more protracted move lower. The bears could then test the resistance set by the 200-day simple moving average (SMA) at 2,953, which currently stands a tad above the 50% Fibonacci retracement at 2,811.
To conclude, ethereum’s post-US election rally has temporarily paused, with the world’s second biggest cryptocurrency trading above a key support level.
