Coming out of weeks of downtrend, Ethereum price may be looking to make another bottom preparing for a campaign to set recent all-time records. This is emphasized by cryptocurrency analyst MMBTtrader, who explained that the Ethereum price crash may be coming to an end. This is evidenced by a number of formations on the Ethereum price chart that suggest where the next rally may begin.
Ethereum price is testing another major support
In an analysis shared on the TradingView website, a cryptocurrency analyst explained that the Ethereum price is currently testing another key technical level. The importance of this level is due to the 50% retracement of the Fibonacci sequence. This therefore means that the Ethereum price sees great support at this level.
This support lies just above the $3,200 level that Ethereum’s price managed to hold during the market crash. This puts a critical level at the 0.5 Fibonacci support level, which currently serves as the next decisive level for the cryptocurrency.
If Ethereum price may rebound hence it may trigger another wave of cryptocurrency recoveries. Moreover, it would be a signal that the bottom has finally been reached and the disaster is over. The analyst further explains that this could lead to a “highly likely setup for a resumption of the original uptrend.”
Such a breakout would lead to a fairly forceful bullish move for the digital asset, and the target from there would be a brand recent all-time high. The first target from here would be $5,500 as the bulls push the price higher. “This target is derived from the size of the previous uptrend and represents a key resistance zone on the higher time frame,” the analyst explained.
The bearish side of the coin
The Fibonacci level of 0.5, as explained above, is the decisive level. This means that whichever direction Ethereum’s price goes after reaching this level can determine which direction the cryptocurrency goes. Since the bullish side has already been explored, there is still a possibility that Ethereum will fail to establish support and bottom.
In the event that Ethereum’s price actually falls below this key level, this would be the case confirm bear pressure which worried the market. The analyst highlights on the chart that if support is broken, then Ethereum could fall below $3,000, with major support located just above $2,400.
Such a drop would mean a more than 30% crash for Ethereum, on top of its already struggling price. Therefore, it is imperative that the bulls stay above $3,200 to prevent further decline.
Featured image created with Dall.E, chart from Tradingview.com
