- Ethereum’s recovery stalls at $1,700, opening the door to the ongoing bearish pressure.
- The IOMAP reveals the presence of intense selling pressure ahead of Ether.
- If the 50-day SMA and the ascending channel’s lower edge support holds, losses eyeing $1,200 will be averted.
Ethereum made a remarkable recovery following the slump to $1,400 from highs above $2,000. The dip allowed investors to join the market at a lower price, anticipating a quick rise back to the new all-time highs of $2,040—a barrier at $1,700 cut short the gains, forcing Ether to see refuge at $1,600.
Ethereum bulls concentrate on holding key support
Ether is dancing at $1,608 at the time of writing. It is trading slightly above an ascending channel’s lower boundary. Increasing selling pressure puts this support in jeopardy. Note that if broken, Ethereum would be vulnerable to losses eyeing $1,200.
The 4-hour chart vividly illustrates a bearish picture based on the Moving Average Convergence Divergence (MACD). This indicator, when used accurately, can suggest positions for selling the top and buying the dip positions.
Ether is in a bearish trend, as reinforced by the MACD line (blue) crossing below the signal line. Besides, the wide divergence between the two lines shows that bears have more influence.
If Ethereum slices through the channel’s resistance and fails to find support at the 50 Simple Moving Average, losses may extend to $1,400 and $1,200, respectively.
ETH/USD 4-hour chart
The IOMAP model by IntoTheBlock (ITB) cements the bears’ influence over the price by revealing the massive resistance zone between $1,645 and $1,693. In this range, nearly 374,000 addresses had previously bought approximately 8 million ETH. Trading above this zone will not be a walk in the park; thus, recovery may take longer to materialize.
On the flip side, Ethereum is sitting on relatively weak support areas, in turn, adding credibility to the bearish notion. However, the model brings our attention to subtle buyer congestion between $1,550 and $1,596. Here, roughly 366,000 addresses are currently profiting from the approximately 2.4 million ETH bought in the zone. In other words, this support area is not strong enough to hold Ethereum for long.
Ethereum IOMAP chart
Looking at the other side of the fence
Ethereum’s uptrend is in jeopardy, but not all is lost for the bulls. Holding above the ascending channel’s lower edge will give buyers a chance to focus on levels at $1,700 and $2,000. Support at this level will also encourage the bulls hiding on the sidelines to return to the market and contribute to the impeding tailwind.
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