TA: Why Ethereum (ETH) Below $3K Could Spark Larger Degree Correction

Ethereum extended its decline below the $3,120 support against the US Dollar. ETH price even spiked below $3,000 and it remains at a risk of more downsides.

• Ethereum started a major decline below the $3,200 and $3,120 support levels.
• The price is now trading below $3,100 and the 100 hourly simple moving average.
• There was a break below a key contracting triangle with support near $3,150 on the hourly chart of ETH/USD (data feed via Kraken).
• The pair could continue to move down if there is a close below the $3,000 support.

Ethereum Price Extends Losses

Ethereum failed to stay above the $3,120 support and extended its decline, similar to bitcoin. ETH price broke the $3,050 support zone and the 100 hourly simple moving average to move further into a bearish zone.

There was also a break below a key contracting triangle with support near $3,150 on the hourly chart of ETH/USD. The pair even spiked below the $3,000 level and traded as low as $2,950. It is now correcting losses and trading above the $3,000 level.

There was a break above the 23.6% Fib retracement level of the recent decline from the $3,282 swing high to $2,950 low. On the upside, an initial resistance is near the $3,075 level.

Source: ETHUSD on TradingView.com

The first key resistance is now forming near the $3,120 level (the recent breakdown zone). It is near the 50% Fib retracement level of the recent decline from the $3,282 swing high to $2,950 low. A clear break and close above the $3,100 and $3,120 resistance levels might start a fresh increase. The next key resistance might be near the $3,200 level, above which the price might revisit $3,330.

More Losses in ETH?

If ethereum fails to continue higher above the $3,100 and $3,120 resistance levels, it could extend its decline. An immediate support on the downside is near the $3,000 level.

The first key support is near the $2,950 level. A downside break below the $2,950 support zone might start a major decline in the near term. The next major support could be $2,875, below which ether may possibly move lower towards the $2,600 support zone.

Technical Indicators

Hourly MACD – The MACD for ETH/USD is slowly losing pace in the bearish zone.

Hourly RSI – The RSI for ETH/USD is now below the 50 level.

Major Support Level – $3,000

Major Resistance Level – $3,120