The 50 EMA, a crucial technical level that serves as a solid support for bullish momentum, has been breached by Ethereum. The asset is at a turning point, and the sustainability of its bullish trend is called into question, as is its capacity to sustain its recent recovery.
Key data points
Volume
133.57 K ETH
Previous close
3,422.53 USDT
Open
3,422.53 USDT
Day's range
3,358.19 — 3,434.97USDT
ETHUSDT
When this level is lost, the market structure is weakened, and bears may take control. The RSI's declining momentum, which has further dipped into neutral territory, indicates less buying pressure, which is also consistent with the drop. Ethereum may further decline to test the 100 EMA somewhere around $3,100 if it is unable to swiftly recover the 50 EMA.
If this level is broken, the sell-off could continue toward the 200 EMA at $3,044, the final significant support area before a more significant correction. Between $3,100 and $3,400, Ethereum may trade sideways as it enters a consolidation phase. This situation would be indicative of market hesitancy as traders watch for more powerful catalysts to move ETH in either direction.
Ethereum's upward trajectory could be reaffirmed if there is a rapid recovery above the 50 EMA and more volume. If momentum picks back up, Ethereum might rise toward $3,800. In this scenario, $3,500 might be the next resistance level. The trading sessions that follow will be very important for Ethereum.
To prevent more sell pressure, the 50 EMA must be recovered. However, ETH may enter a more severe correction phase if there is persistent pessimism and no buying support. Ethereum is currently at a turning point, and how well it can recover from its losses will dictate its course for the coming year.
