- Ethereum pushed back above $3,000 after a sharp decline, offering a tentative sign of stabilization despite a recent death cross.
- Key support sits near $2,500, and sustained Bitcoin strength may be required for any larger bullish move.
Ethereum rallied during the trading session on Wednesday as we broke back above the $3,000 level. At this point, it's worth noting that Ethereum has sold off quite viciously and now is at least trying to turn things around. But we've also seen the 50-day EMA break down below the 200-day EMA in the last couple of days, kicking off the so-called death crosses. This is a longer-term negative indicator that people watch closely, which is longer-term focused. I don't necessarily think that Ethereum is going to collapse at this point. In fact, it has really already come down quite a bit from the highs. But I think if we get the potential to find buy on the dip opportunities, then maybe we have to take the $2,500 level looks to be a major floor.
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Support at $2,500 and Dependence on Bitcoin
So as long as we can stay above there, I think there's the possibility that we try to go back and forth and form some type of basing pattern. Keep in mind that Ethereum, of course, is the little brother of Bitcoin. So, Bitcoin will probably have to rally in a sustained manner for Ethereum to take off to the upside. Whether or not Ethereum can hang on at this point remains to be seen, but I think there's at least the hope that we have seen the bottom.
A little bit of sideways action probably goes a long way here, as it gives people the opportunity to catch their breath and then perhaps build up a little bit in the way of confidence in a market that desperately needs it. If the market can rally from here, it's possible that Ethereum could go looking to the $5,000 level before it's all said and done, but it looks like there is a very clear and concise support and resistance level that the market will have to pay attention to every $500 along the way.
If we were to turn around and break down below the $2,500 level, that would be very negative.
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