Ethereum has reached and reacted from a key support area around $400.
As can be seen from the chart, this price level was a significant resistance and then support in the past, and is where a long-term bullish trend line comes into play. If the sellers were to remain in full control, they would need to hold Ethereum below this level. However, the cryptocurrency is refusing to go down without a fight.
Over the past several days, it has consolidated tightly around $400 and now it looks like it wants to push higher. Granted, no technical breakthrough has yet been achieved by the bulls, but this is nonetheless a tentative bullish sign which points to waning selling pressure. The bulls would now like to see the breakdown of a few resistance levels, starting with $452, before they can become confident about a possible reversal in the trend.
The next resistances are seen at $510 followed by $565, levels which were formerly support. Meanwhile if support at $400 gives way then there is little further support seen until $300.
It is worth remembering that technically the trend is still bearish and the path of least resistance to the downside. Traders need to approach Ethereum with a very open mind at this stage, as we haven’t had a break in market structure of lower lows and lower highs yet. If and when we create a few higher lows and higher highs only then can we become confident about a possible trend reversal.
For now, the hesitation around the $400 support level could just be a short-covering bounce, rather than anything significant. Still, the importance of the $400 support level should not be ignored. There is always the possibility that this bounce could turn into something more significant. So, watch Ethereum prices closely here.
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