Ethereum has been trading within a descending channel since early March, showing persistent bearish pressure as price continues to make lower highs and lower lows.
The recent price action indicates that ETH/USD may have found temporary support around the $1,400 level, triggering a modest bounce from oversold conditions.
However, this bounce already encountered strong resistance at the middle of the channel, cutting short its correction to the top. The descending channel’s upper boundary, which aligns with previous support-turned-resistance levels, further reinforces the bearish bias in the pair.
A rejection from the current price level or a break below the channel bottom could signal a resumption of the downtrend, potentially pushing ETH toward the 76.4% Fibonacci level at $1,211.38 or even the 100% level at $1,083.22.
ETHUSD Technical Analysis
The moving averages paint a bearish picture, with the 100-period MA (shown as MA(100, close)) and the 200-period MA (MA(200, close)) both trending downward and positioned above the current price. This configuration typically signals strong bearish sentiment as the shorter-term momentum aligns with the longer-term downtrend.
The stochastic oscillator (Stoch(14, 3, 3)) is currently moving upward from previously oversold conditions, suggesting that the current bounce may have some room to extend. However, as the indicator approaches the overbought territory (above the 80 level), we could see selling pressure re-emerge, especially if this coincides with a test of the key Fibonacci retracement levels mentioned earlier.
The MACD indicator (MACD(12, 26, close)) shows a slight improvement in momentum with diminishing negative histogram bars, though the MACD line remains below the signal line and the zero line, maintaining an overall bearish bias. A potential bullish crossover may provide temporary support for the current bounce, but the broader downtrend structure remains intact.
Ethereum Price Outlook
If sellers regain control at the current levels, we could see ETH/USD resume its decline within the descending channel, targeting the recent low at $1,083.22. A break below this support could accelerate the downside momentum, with the next significant target being the full Fibonacci extension.
Alternatively, if buyers manage to push the price above the middle of the channel, price could still hit the ceiling at the top. A break above this, however, could indicate a potential trend shift or at least a more significant correction.
Ethereum’s price action is occurring against a backdrop of general cryptocurrency market weakness, mirroring Bitcoin’s recent setback. While the longer-term outlook for cryptocurrencies remains supported by expectations of more crypto-friendly policies under the current administration, near-term technical factors suggest caution.
In addition, worsening trade tensions are keeping traders risk averse, thereby weighing on crypto assets and other higher-yielders like commodities and stocks. Any signs of a reprieve could lead to a pop higher for riskier assets and near-term retracements.
The continued adherence to the descending channel pattern indicates that market participants are currently more inclined to sell rallies rather than buy dips. Traders should watch for potential reversal candlestick patterns at key Fibonacci levels, which might signal shifts in sentiment, while remaining aware that the prevailing bearish structure remains valid until a confirmed breakout above the descending channel occurs.
