After weeks of trending lower, Ethereum price could look to establish the next bottom as it prepares for a campaign towards new all-time highs. This is highlighted by crypto analyst MMBTtrader, who explained that Ethereum’s price fall may be coming to an end. This is demonstrated by a number of formations on the Ethereum price chart that suggest where the next rise could begin.
Ethereum Price Tests Next Major Support
In an analysis shared on the TradingView website, the crypto analyst explained that Ethereum price is now testing the next crucial technical level. The importance of this level comes with a 50% retracement of the Fibonacci sequence. So this means that the Ethereum price is seeing major support at this level.
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This support sits just above the $3,200 level, which Ethereum price managed to hold during the market crash. This places the critical level at the 0.5 Fibonacci support, which currently serves as the next decisive level for the cryptocurrency.
If the Ethereum price manages to rebound from here, then it could trigger the next wave of recovery for the cryptocurrency. Additionally, it would be the signal that the bottom has finally been reached and the crash is over. The analyst further explains that this could lead to “a very likely setup for a resumption of the main uptrend.”
Such a breakout would result in a fairly strong upward move for the digital asset, and the target from here would be a brand new all-time high. The first target from here would be $5,500 as the bulls push the price higher. “This target stems from the magnitude of the previous uptrend and represents a key resistance zone on the higher timeframes,” the analyst explained.
The bearish side of the coin
The 0.5 Fibonacci level, as explained above, is a decisive level. This means that whatever direction the Ethereum price takes after reaching this level could determine the direction the cryptocurrency takes next. With the bullish side already explored, there is still the possibility that Ethereum fails to establish support and a floor.
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If the Ethereum price did indeed fall below this crucial level, it would confirm the bearish pressure that has plagued the market. The analyst highlights on the chart that if support breaks, Ethereum could fall further below $3,000, with major support lying just above $2,400.
Such a drop would mean a crash of over 30% for Ethereum, on top of an already struggling price. Therefore, it is imperative that bulls hold above $3,200 to avoid further decline.
Featured image created with Dall.E, chart from Tradingview.com
