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ETH Price Analysis: Ether Rebounds 20% Higher From Lows Amid Flash Crash, As Investors Buy the Dip

  • At the time of analysis, ETH ticks up at $4,140, although risk sentiment remains fragile
  • ETH/USD price has essentially ignored the flash crash drop and reactivated the daily horizontal support level at $4,000
  • ETH outperforming in its BTC pairing

Ethereum and other cryptocurrency prices plummeted Saturday and crashed to their lowest level in nearly two months, repeatedly plunging below the $4,000 critical support level. The industry’s second-largest asset by market cap appears to be up today, having easily brushed aside the weekend’s drop to a $3,575 low. After suffering losses, ETH/USD price has essentially ignored the flash crash drop and reactivated the daily horizontal support level at $4,000. In 24 hours, Ether rebounds 20% higher from lows to register a $4,257 intraday high. At the time of analysis, ETH ticks up at $4,140, although risk sentiment remains fragile. Ethereum might continue to advance against the market’s bearish trend, albeit only modestly, as investors sought to buy the dip of the second-largest asset by market cap amid concerns around the health of the global economy and the outlook for trade. Attesting to this risk-off mood is ETH outperforming in its BTC pairing, which was propelled higher by its robust use case in the metaverse, NFTs, and DeFi applications.

Key Levels
Resistance Levels: $5,000, $4,700, $4,400
Support Levels: $4,000, $3,700, $3,400

ETH/USD Daily Chart: Ranging

ETH/USD Daily Chart

The daily chart shows the recent drop through trend line support and instant recovery in a clear view. Although as seen technically on ETH/USD, current development argues that corrective rebound from $3,575 flash crash low has completed at $4,257 intraday high already. This is supported by a mild bearish divergence condition in the Relative Strength Index, as well as rejection near the moving average (MA 50).

The focus is now on $4,000 support. A break there will confirm if the bearish case can be sustained. As the $3,575 is an abnormal spike low, it’s hard to judge whether it would be taken out in the near term at this point. The momentum through $4,000 should be watched to assess the chance. But in any case, risk will now stay on the downside as long as MA 50 at $4,350 holds, even in case of strong recovery.

ETH/USD 4-Hour Chart: Ranging

ETH/USD 4-Hour Chart

The short-term outlook remains negative, as the pair holds in red towards the $4,000 support with bearish technicals supporting the scenario. A rejection at key $3,700 support zone and Relative Strength Index (RSI) reversing from oversold territory, suggests that bears may consolidate before the fresh attack at $4,000.

Although dips should find ground to keep bullish near-term structure off recent lows of December 4 flash crash for a renewed attack above the 4-hour moving averages (MA 50 and MA 200). ETH/USD might once again look for support in the lower trend line of the channel down pattern or round price levels. Most likely, support would be located around the $4,000 mark.

Note: Kryptomoney.com is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results

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