Ethereum extended its decline and it traded close to $2,300 against the US Dollar. ETH price is now recovering and it could start a strong increase if it clears $2,550.

Ethereum failed to stay above the key $2,550 support level, and it extended its decline. ETH traded below the $2,440 and USD 2,400 support levels.

It even broke $2,350 level and settled well below the 100 hourly simple moving average. A low is formed near $2,313 and the price is now correcting higher. It broke the $2,400 resistance level. Ether also climbed above the 23.6% Fib retracement level of the of the recent drop from the $2,850 swing high to $2,313 low.

However, the price is now facing a strong resistance near $2,500. There is also a major bearish trend line forming with resistance near $2,480 on the hourly chart of ETH/USD.

It seems like ether is likely forming an inverse head and shoulders pattern with resistance near $2,550. The 50% Fib retracement level of the of the recent drop from the $2,850 swing high to $2,313 low is also near the $2,580 level.

If there is a clear break above the trend line and a follow up move above $2,550, the price could start a strong increase in the near term. The next major resistance could be $2,640.

If Ethereum fails to clear the $2,500 and $2,550 resistance levels, it could extend its decline. An initial support on the downside is near the $2,400 level.

The first major support is near the $2,350 level. A downside break below $2,350 and the recent low could accelerate losses. The next major support is near the $2,220 level or $2,200.

Technical Indicators

Hourly MACD – The MACD for ETH/USD is slowly gaining pace in the bullish zone.

Hourly RSI – The RSI for ETH/USD is currently approaching the 50 level.

Major Support Level – $2,350

Major Resistance Level – $2,550

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