Ethereum price action recovers although bulls not out of woods just yet

Ethereum (ETH) price action is recovering this morning as bulls buy the dip. With the marker at $1,100 being hit overnight, buyers are adding Ethereum in their portfolios at the lowest price area in 2022. Add in the fact that the Relative Strength Index (RSI) has been hitting the oversold barrier on Wednesday, bulls should keep a close eye on $1,234 as it could cap price action and create a dead cat bounce.

ETH price action recovers but not fully declared healthy 

Ethereum price action joined the other major cryptocurrency pairs in the massacre that followed on the back of Binance’s intent to take over the much-battered crypto exchange FTX. The meltdown on Tuesday was caused by the legal fact that the letter of intent was non-binding and thus gave Binance a jail-free card to walk away from the deal at any given time. Almost exactly 24 hours later, it did so, as it said the juice was not worth the squeeze. This triggered another 17% decline in ETH price.

ETH price action has been recovering this morning as the area where price action is residing at the moment is in the lower range of 2022. Bulls are eager to be part of the market here to buy at a discount, which could push price action back up toward $1,243. That level intersects with the low of February 1, 2021, and with the red descending trendline from September. 

Risk at hand here is that bulls test that $1,243 level and fail to break its double resistance. Bears would use the level as an entry level and push price action back to the downside, making it a dead cat bounce. Ultimately, the low of Wednesday would be tested near $1,073, and ETH could see a smaller leg lower toward $1,014, which is a key level since June 15.

ETH/USD daily chart