Ethereum (ETH) In Trouble? Key Reasons This Week’s Close Is Crucial

Ethereum (ETH) is down over 25% from the $3,500 zone. It must stay above the $2,120 and $2,000 levels to attempt a major setback.

Ethereum Price Dips Over 25%

After a strong rejection near $4,100, Ethereum saw bearish moves on the weekly chart. There was a move below the $3,500 and $3,350 support levels. The bears remained in action below the $3,500 level, resulting in a sharp decline, underperforming Bitcoin.

In the past 3-4 sessions, ETH saw a major decline below the $3,000 support zone. The pair declined below the 61.8% Fib retracement level of the main increase from the $2,099 swing low to the $4,087 high.

Ethereum is down over 25% and there was a close below the 50-week simple moving average (blue). The price even declined below the 76.4% Fib retracement level of the main increase from the $2,099 swing low to the $4,087 high.

More importantly, the price is now struggling to stay above a crucial bullish trend line with current support at $2,550 on the weekly chart. The price is now correcting some losses from the $2,100 zone, but it faces an uphill task.

Immediate resistance is near the $2,550 level. The first major resistance is $2,850. A clear move above the $2,850 resistance might send the price toward the $3,000 resistance.

The next resistance is now forming near the $3,200 zone and the 50-week simple moving average (blue).  If the price clears the $3,200 resistance, it could gain bullish momentum and rise toward the $3,500 resistance. A close above the $3,500 level could open the doors for a fresh test of the $4,000 barrier.

Another Decline In ETH?

Conversely, Ethereum might fail to stay above the trend line support this week and continue to move down. Immediate support is near the $2,360 level. The first major support is near the $2,100 level.

A weekly close below the trend line support and a follow-up move below $2,100 could trigger a nasty drop. In the stated case, the price might decline toward the $1,800 region.

Any more losses might send ETH toward the $1,550 level in the medium term or the 1.236 Fib extension level of the main increase from the $2,099 swing low to the $4,087 high at $1,630.

Overall, Ethereum price is consolidating losses and facing many challenges. ETH could start a decent increase if it stays above $2,500. If not, it might dive to $1,800.

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