Ethereum’s recent sell-off has pushed it price down to reach a key support area around $400. This level was a significant resistance in the past while a bullish trend line also comes into play here.
Ethereum has consolidated tightly around this $400 for several days now. However no technical breakthrough has yet been achieved by the bulls yet. Nevertheless this is a tentative bullish sign as it points to weakening selling pressure.
If we now see the breakdown of a few resistance levels such as $452, then we can become confident about a possible reversal in the trend. Further resistances are seen at $510 followed by $565. These levels were previously support.
However, if support at $400 breaks then there is little further support until $300.
Despite the bounce, the trend is still technically bearish. We haven’t had a break in market structure of lower lows and lower highs yet. Thus, the hesitation around the $400 support level could just be a short-covering bounce, rather than anything significant.
But if and when Ethereum creates a few higher lows and higher highs only then can we become confident about a possible trend reversal. Indeed, the importance of the $400 level should not be ignored, so watch Ethereum prices closely here.