Ethereum (ETH) is experiencing a significant decline, with its price quickly approaching the key support level of $3,051. This piercing decline highlights the increased selling pressure and growing bearish sentiment in the market.
As Ethereum approaches this critical threshold, traders are closely watching its performance for signs of stabilization or further decline. The $3,051 support level is now the focal point, defining the short-term direction of Ethereum price action and potentially setting the stage for future moves in the cryptocurrency market.
This article aims to analyze the piercing decline that has hit the digital asset and its impact on the cryptocurrency’s price as it approaches the $3,051 support level. It also aims to provide traders and investors with a comprehensive understanding of the current situation, potential scenarios if the support level holds or is broken, and risk management strategies in this volatile environment.
ETH is currently trading at around $3,181, down 5.05% with a market cap of over $382 billion and trading volume of over $18 billion at the time of writing. Over the past 24 hours, there has been a 5.25% drop in ETH market cap and a 74.43% escalate in trading volume.
Technical indicators pointing to Ethereum falling
Technical analysis of ETH price action on the 4-hour chart reveals that the crypto asset is actively bearish and trading below the 100-day elementary moving average (SMA). Ethereum has been consistently bearish since breaking the $3360 level and is currently heading towards the $3051 support level.
Moreover, the analytical view of the 4-hour Composite Trend Oscillator shows that the ETH price may continue to follow a downward path as both the signal line and the SMA of the indicator have fallen below 50% and are trying to enter the oversold zone.
On the 1-day chart, the cryptocurrency has sharply fallen below the 100-day moving average (SMA) and is trying to break below the uptrend line while heading towards the $3,051 support level.
Finally, on the 1-day chart, the Composite Trend Oscillator is pointing to a further downside move for ETH, as both the signal and the indicator’s moving average are in the oversold zone.
What happens if support at $3051 fails?
Analyzing the potential implications of Ethereum breaking through the $3,051 support level reveals that if the price of the digital asset breaks below this level, it could decline and test the $2,865 support level, and possibly the $2,160 support level and other lower levels if the price breaks through this level.
However, if Ethereum price encounters a rejection at the $3,051 support level, it will begin to rise towards the $3,360 resistance level. If the asset breaks through this level, it could continue rising to test the $3,659 resistance level and possibly move on to testing other higher levels if it breaks through the $3,659 level.
Featured image from iStock, chart from Traadingview.com
