Ethereum (ETH/USD) appears to have found solid footing around the $2,200 support zone after a sharp pullback from recent highs, with the cryptocurrency now showing signs of a potential bullish recovery.
The digital asset has been testing this critical support level multiple times over the past few sessions, suggesting that buyers are stepping in to defend this key psychological and technical area and possibly aiming for the latest highs around the $2,800 region.
Technical Recovery Pattern
Recent Ethereum price action reveals a classic support and resistance dynamic, with the $2,200 level acting as a crucial floor for the cryptocurrency. After the dramatic selloff that took price from the $2,700 highs down to current levels, Ethereum has been forming higher lows, indicating that selling pressure is beginning to diminish while buyer interest increases at these discounted levels.
The moving averages are providing mixed signals at current price levels. The 100 SMA (red line) is currently acting as dynamic resistance around $2,550, while the 200 SMA (blue line) sits slightly higher near $2,600. Price is trading below both key moving averages, which suggests that the longer-term trend has shifted to neutral-to-bearish in the near term.
However, the fact that Ethereum is holding above the ascending support line from the longer-term uptrend indicates that the broader bullish structure remains intact.
Should Ethereum manage to reclaim the area above the moving averages, it would signal a more convincing bullish reversal. The Fibonacci retracement tool from the recent swing high to the current support level shows key resistance areas that price needs to overcome.
The 38.2% retracement sits around $2,390, while the 50% level aligns with approximately $2,450. A successful break above these Fibonacci levels would suggest that the correction is complete and a new leg higher could be underway.
The current consolidation pattern around $2,200 support resembles a bottoming formation, with multiple tests of this level showing that buyers are willing to step in at these prices. This type of price action often precedes significant bounces, especially when combined with oversold momentum readings.
Potential Ethereum Reversal
The stochastic oscillator has spent considerable time in oversold territory below the 20 level, indicating that the selloff may have been overdone. Recent readings show the oscillator beginning to curl higher from deeply oversold conditions, suggesting that bullish momentum could be building. This type of divergence between price and momentum often precedes meaningful reversals in Ethereum’s price action.
The MACD histogram is showing signs of convergence near the zero line, with the recent selling pressure beginning to wane. While the MACD lines remain below zero, indicating that bearish momentum is still present, the flattening trajectory suggests that the downtrend is losing steam. A bullish crossover of the MACD lines would provide additional confirmation that the recovery is gaining traction.