Ethereum has recently broken below a significant support level, indicating that bearish momentum could be gaining traction in the short term.
Currently trading at $2,374.89, ETH has slipped beneath what appears to be a key horizontal support that had previously acted as a floor during multiple tests over the past two weeks.
This breakdown follows a period of consolidation after ETH reached highs near $2,700 in mid-March, with price action forming what resembles a double top pattern on the daily chart. The cryptocurrency has been unable to maintain its position above both the 100 and 200 Simple Moving Averages (SMAs), suggesting that sellers have gained the upper hand in recent sessions.
Rising Bearish Momentum
The moving average configuration is particularly telling for Ethereum’s near-term prospects. The blue 100 SMA has crossed below the red 200 SMA, forming what traders often refer to as a “death cross.” This technical event typically signals that shorter-term momentum has turned negative relative to the longer-term trend.
Looking at the oscillators, both the stochastic and MACD indicators are reinforcing the bearish outlook. The stochastic has recently turned lower from near-overbought territory and is now heading toward the oversold zone, indicating accelerating selling pressure.
More concerning for bulls, the MACD histogram shows expanding red bars below the zero line, while the MACD line itself has crossed below the signal line, confirming the bearish momentum.
Volume analysis also supports this view, with increasing selling volume accompanying the recent breakdown, suggesting conviction behind the downward move rather than a temporary fluctuation. This combination of price action breaking support with confirming volume and bearish indicator signals raises the probability that Ethereum could test lower support levels in the coming sessions.
Potential Ethereum Scenarios
Several critical price zones warrant attention, as the immediate resistance now lies at the broken support level around $2,450, which could now function as resistance on any attempted recovery. Above this, the converging moving averages near $2,520-$2,550 represent a formidable barrier that bulls would need to overcome to invalidate the bearish scenario.
On the downside, the next significant support level appears to be around the psychological $2,300 mark, followed by a potential target around $2,200, which aligns with previous consolidation areas from earlier periods on the chart. Should selling pressure intensify, we could see a move toward the $2,100 level, which would represent a more significant correction from recent highs.
From a broader perspective, while this short-term technical breakdown is concerning for Ethereum bulls, it’s worth noting that the longer-term uptrend from late 2023 remains intact as long as ETH maintains support above the $2,000 level. The current price action could represent a larger correction within that longer-term bullish structure rather than a complete trend reversal.
Market participants should also be mindful of the overall crypto market sentiment and Bitcoin’s performance, as Ethereum tends to show correlation with the broader market, especially during significant directional moves. Additionally, any developments regarding Ethereum’s technological roadmap or regulatory news could override technical factors and cause unexpected price movements.
