Ethereum has experienced a notable decline from recent highs, with ETH/USD breaking below a descending triangle formation and currently testing support levels around the $2,491 area.
The chart reveals that Ethereum has fallen from resistance near the $2,550 level, which has brought price action down to test the convergence of several technical support levels, including the 38.2% Fibonacci extension at $2,432 and the psychological $2,400 zone.
Currently trading around $2,491, Ethereum is facing rejection at the bearish trend channel top to indicate that a continuation of the downtrend may be in the works. The Fibonacci extension tool shows further downside targets in case the selloff picks up.
A decisive break below the mid-channel area of interest could open the door for a deeper slide toward the 61.8% Fib at $2,363 or even the 76.4% level at $2,320. The full extension is at $2,251.13 below the channel support.
The descending channel resistance from the recent highs continues to act as a formidable barrier for any recovery attempts. For Ethereum to regain bullish momentum, it would need to reclaim levels above $2,550 and eventually challenge the trend line resistance that has been capping upside moves.
Mixed Price Outlook
The moving average structure reflects the current bearish Ethereum bias, with shorter-term averages likely positioned below longer-term ones, confirming that the path of least resistance remains to the downside. However, price is approaching levels where these dynamic indicators could potentially provide support if buying interest emerges.
The MACD histogram shows concerning bearish momentum, with the indicator diving deeper into negative territory. This suggests that selling pressure has been intensifying, and any recovery attempts may face significant headwinds until the momentum oscillator can show signs of bottoming out.
However, the stochastic oscillator appears to be approaching oversold territory, which could indicate that the current selloff may be reaching exhaustion levels. The oscillator’s positioning suggests that while bears have been in control, conditions are becoming ripe for a potential bounce if buyers can step in at current levels.
Critical Support Test
The immediate focus for Ethereum remains on whether the current support zone around $2,400-$2,490 can hold firm against selling pressure. This area represents the confluence of multiple Fibonacci levels and could serve as a launching pad for a corrective bounce if buyers emerge.
A successful defense of these support levels could trigger a relief rally back toward the $2,550-$2,600 resistance zone. However, such a move would likely face strong headwinds from the descending trend line and would need substantial volume confirmation to suggest a more meaningful reversal is underway.
Conversely, a breakdown below the 50% Fibonacci retracement would be concerning for the near-term outlook and could accelerate selling toward the deeper retracement levels. The $2,320-$2,363 zone would then become the next critical support area to monitor, as broader cryptocurrency market developments and major financial headlines could impact risk asset behavior throughout the week.
