Ethereum fell below the $3,700 threshold, failing to break through the consolidation channel. With the price failing to surge upward, we might see another period of consolidation where the moving average could catch up with the massive volatility witnessed a few weeks ago and potentially provide some ground for a rally continuation.
Since this level has been a crucial area of support for ETH, the recent decline below $3,700 is especially raising some concerns and questions. If it breaks below, it may indicate that bulls need to reorganize as bears are becoming more powerful.
Sharp swings in price action are characteristic of a volatile asset like Ethereum. Based on the current trend, it appears that ETH is having difficulty keeping up its upward momentum.
Ethereum went through a consolidation phase, fluctuating between support and resistance levels, as the chart illustrates following a significant rally. This type of activity typically occurs before a notable change in price either upward or downward.
A deeper drop toward the 200-day MA, a more reliable measure of the direction of the long-term trend, could occur if it is unable to hold. In the near run, this might entail increased downside risk. An additional important consideration is volume.
Higher-than-average trading volumes were seen along with the recent decline, suggesting that sellers are more active. This could indicate that more traders are cutting their positions, which would put more pressure on the price to decline. The RSI, on the other hand, is circling around neutral. This shows that Ethereum has room to recover if the mood of the market turns around, and it is neither overbought nor oversold.