Ethereum (ETHUSD) has recently undergone a significant pullback after reaching new highs around the $1,836 level, signaling a potential correction phase in what has otherwise been a strong uptrend.
The cryptocurrency appears to be testing key Fibonacci retracement levels which could determine whether the recent upward momentum will continue or if a deeper correction is in store.
Key Ethereum Levels To Watch
The chart shows several critical Fibonacci retracement levels that traders should monitor closely. The 38.2% Fibonacci retracement level sits at $1,722.98, while the 50% level is positioned at $1,688.02. A deeper correction could test the 61.8% Fibonacci level at $1,653.07, which might serve as the line in the sand for the bullish pullback scenario.
Currently, Ethereum is trading at around $1,765.69, having bounced slightly from lower levels, but still showing signs of bearish pressure. The 100% retracement level at $1,539.90 would represent a complete reversal of the prior rally and could come into play if support levels fail to hold.
The uptrend line that has been supporting the recent advance appears to be under pressure, with price action suggesting that Ethereum might be establishing a short-term downtrend following what looks like a double top formation near the $1,836 resistance area.
Technical Indicators Analysis
The moving averages present a mixed but slightly bullish picture. The blue 100 SMA is above the red 200 SMA, suggesting that the path of least resistance remains to the upside despite the recent pullback. The gap between the indicators is also widening, reflecting strengthening bullish momentum.
Stochastic indicators are showing a downward trajectory from what appears to have been an overbought condition, indicating that sellers currently have the upper hand. The oscillator has room to continue lower before reaching oversold territory, suggesting that the correction might not be over yet.
MACD appears to be trending lower as well, confirming the bearish momentum in the short term. However, it hasn’t reached oversold levels yet, meaning there could be additional downside before buyers step in more aggressively.
Ethereum Price Outlook
Ethereum appears to be in a corrective phase after its recent rally, with the Fibonacci retracement levels offering potential support zones where buyers might step in. If the 38.2% Fibonacci level at $1,722.98 holds, we could see a resumption of the uptrend with targets back toward the recent highs and potentially beyond.
However, if Ethereum breaks below the 50% retracement level at $1,688.02, this could signal a deeper correction targeting the 61.8% level at $1,653.07. A breakdown below this critical Fibonacci support would indicate a significant shift in market sentiment and could open the path toward the 100% retracement level around $1,539.90.
From a fundamental perspective, Ethereum’s price action may be influenced by broader cryptocurrency market trends, including Bitcoin’s performance and developments in the digital asset regulatory landscape under the current administration. Additionally, upcoming network upgrades and institutional adoption patterns could impact investor sentiment in the medium term.
Traders should watch for potential reversal candlestick patterns at the Fibonacci levels, as these could provide early signals of whether the correction is over or if the downtrend will gain further momentum. Long green candles closing above the 38.2% Fibonacci level would suggest renewed buying interest, while continued bearish price action breaking below the 61.8% level would confirm that sellers have firmly taken control of the market.
