The Ethereum price is approaching a minor support level. While it could initiate a bounce if it gets there, it is more likely that it will decrease towards the long-term ascending support line.
Ethereum has been decreasing rapidly since April 26, after reaching a high of ₿0.0206. Cryptocurrency trader @TraderX0X0 stated that after this decrease, the Ethereum price is close to reaching a major support level.
TraderX0X0 summarized their thoughts stating:
$ETHBTC – Finally coming into the level I wanted to speculate buying ETH Really needs to hold this level otherwise most likely it drops down to the yearly open as the next level of interest If btc starts breaking down then not sure why ETHBTC will hold up
Note: This article will deal with the ETH/BTC pair. For the ETH/USD analysis, click here.
Ethereum’s Support Levels
The Ethereum price is approaching the minor support level found at ₿0.0205. The price reached this level on March 26 and promptly initiated an upward move.
The current period is similar to that of March 26, as both times ETH fell below its 200-day moving average (MA). While this is considered a bearish development, it is worth keeping an eye on if the same movement transpires this time around.
However, the more likely place for a reversal would be found at ₿0.019. This is both a major support level and also coincides with the long-term ascending support line that’s been in place since September 2019.
Descending Channel
In the short-term, the price is trading inside a descending channel. At the time of publishing, it was trading directly above the support line of this channel, along with the support area from the previous section.
Furthermore, the RSI has been generating bullish divergence. Therefore, an upward move towards the resistance line of the channel seems almost certain, and a breakout could occur. However, this is more likely to be a short-term occurrence, after which the price decreases towards the long-term ascending support line.
To conclude, the Ethereum price has reached an important support level that could initiate a short-term bounce. However, it is more likely that the price decreases afterward and falls back to the long-term ascending support line.
Bitrue