Ethereum (ETH) is at risk of dropping $2,000 if this level falters
The major cryptocurrency opened the week lower as investors continue to worry about falling Bitcoin prices and thus appear to be reducing their exposure to the broader market in anticipation of lower prices.
Ethereum, the second-largest cryptocurrency by market capitalization, fell 2.66% to $2,408 in the past 24 hours, mirroring the overall market trend.
Ethereum has been declining steadily since reaching a high of $2,717 on January 12, bringing it into a critical demand area that remains decisive for its short-term price movement.
Cryptocurrency analyst Ali said that ETH is currently in a key demand area, ranging from $2,388 to $2,460. If this support remains strong, there appears to be a clear path ahead with minimal resistance, providing the potential for an upward move.
Ethereum Market Update: ETH is currently trading in key demand areas, within a range of $2,388 to $2,460. If this support remains strong, there is a clear path ahead with minimal resistance, providing the potential for upward movement.
⚠️ However, if #ETH fails to sustain this level, we may see a pullback to the next significant support area around $2,000.
— Ali (@ali_charts) January 21, 2024
However, if ETH fails to hold this key support level, a bearish scenario could emerge. Ali said that if ETH fails to sustain this level, a pullback to the next significant support area around $2,000 is likely.
If the price reaches around $2,000, it would represent a 17% drop from the current price of $2,408. The next major support below $2,000 is the daily simple moving average (SMA) 200, currently at $1,923.
A break above this level could lead to more losses, possibly towards the $1,800 and $1,700 levels. Meanwhile, the 50 moving average daily level at $2,338 may seek to cut losses in the near term.
On the other hand, if ETH reverses the current decline and rebounds from the $2,388 and $2,460 support areas, it may resume the uptrend and target the $2,614 levels once again.
A successful break above this level could pave the way for a rally towards the $2,717 and $2,900 levels, which is where the coin faces its next hurdle. The bulls’ ultimate goal is to reclaim the psychological $3,000 level hit in April 2022.
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