Ethereum price faces a potential 30% correction after failing to break $400

Ether price is struggling despite Bitcoin rising, which may embolden the bears to push the price down below $300 before another major rally can occur.

The cryptocurrency market momentum has swung back to Bitcoin (BTC) recently as BTC dominance and trading volumes have been climbing along with the price. In that regard, the primary altcoin indicator Ether (ETH) has not been doing well as ETH/BTC dropped 30% in the last two months. 

Now many crypto traders are asking when the altcoins will bottom out and start to rally again. Let’s take a looks at what the charts are showing. 

Ether staying above 100-week and 200-week MAs

ETH/USD 1-week chart. Source: TradingView

The weekly chart shows a precise range as Ether’s price couldn’t break through the resistance zone at $450. However, some bullish indicators are also seen on the charts.

One of those bullish indicators is the breakthrough of the 100-week and 200-week moving averages (MAs). These MAs are often seen as a crucial indicator of bullish/bearish sentiment of the markets. As the price of Ether broke through the MAs in the previous months, it can be said with confidence that this cryptocurrency is in bullish territory.

However, another bullish argument is the breakthrough above $270, which has been resistance for over a year and was only overcome in recent months.

An apparent breakthrough occurred, after which the price of Ether rallied towards $450. In this breakout, however, no clear support/resistance flip of this $270 zone occurred, which means a retracement toward this level will be relatively healthy.

Hence, a range between $270 and $450 is established based on the weekly chart. In other words, a likely retest of the $270 area is on the table.

Breaking the $450 to the upside means continuation toward $800 is very likely.

Ether resting on $368-375 support

ETH/USD 1-day chart. Source: TradingView

The daily chart shows a potential rising wedge construction with decreasing volume. This rising wedge construction is currently resting on the $368-378 support level. This level is crucial for lower timeframes.

If this area is lost, a sharp fall can be anticipated. In that regard, a test of the $315 level or even the $270 and potentially $250 levels are on the table. If the $368-378 level is lost, the 100-day MA will also lose its support value, indicating more downside potentia.

ETH/USDT 4-hour chart. Source: TradingView

The 4-hour chart indicates a slight upwards move in the previous 24 hours. However, the push upward couldn’t break through the resistance zone at $400, which resulted in a significant drop afterward.

This drop was also caused by weakness on the Bitcoin markets and a significant inflow of ETH from a single entity to the exchanges, just minutes before the fall occurred.

ETH/BTC facing potential support zones

Historically, Q4 is not the best period to hold ETH until it bottoms out in December. It doesn’t seem to be any different this year so far as Ether’s price fell 30% since its recent high at 0.04 sats.

ETH/BTC 1-week chart. Source: TradingView

The Ether chart against Bitcoin is showing a clear view of the support and resistance levels.

On the higher timeframes, a potential support zone is approaching. Alongside the 200-week MA, support could be found at the 0.024-0.026 sats area, as that’s the previous resistance zone to flip for support.

ETH/BTC 1-day chart. Source: TradingView

The ETH/BTC daily chart of Ether shows a slight bounce in the last days as the 0.028 sats area served as support. However, there’s no sign of reversal yet as the price of Ether still appears to be correcting.

Bullish arguments can be made once the upper resistance zone at 0.0315 sats breaks and flips for support. Other bullish signs include Ether bottoming out at 0.026 sats with a bullish divergence at the bottom. This would be the strongest indication of any bottom structure.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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