Home Altcoins News Why is Ethereum (ETH) Expected to Retest the $2,500 Support Level?

Why is Ethereum (ETH) Expected to Retest the $2,500 Support Level?

Why is Ethereum Expected to Retest the $2,500 Support Level

The support level is the price at which buyers are most likely to buy or sell a stock.  It refers to the lowest price at which a company’s stock can trade.

When a stock’s price falls to its support level, the support level either holds or confirms, or the stock continues to fall, requiring the previously demonstrated support level to be adjusted to accommodate the new lows.

Limit orders or simply the market action of traders and investors can create support levels in stocks.

What is the support level for Ethereum?  If Ethereum falls below $2,400, it will move towards the next support level, which is near the recent lows of $2,300. If ETH falls below this level, it will be pushed towards the $2,200 support level. If ETH falls below $2,200, it will fall to the next level of support at $2,050.

Ethereum has been activated. Like the rest of the market, it’s been on the decline, but the leading smart contract platform has taken one of the worst beatings.

The digital asset, which had reached $3,000 last week, had quickly lost its footing and was spiraling downward once more. However, Ethereum’s price has continued to fall due to a lack of significant support.

In Recent Decline:  The digital asset had fallen below key support levels. These include the 20 and 50-day simple moving averages, which are critical in determining a cryptocurrency’s support and subsequent bottom. This has put significant selling pressure on Ethereum, and the digital asset has continued to be rocked by sell-offs.

The lack of any short-term support for Ethereum:  When an asset falls below its 50-day moving average, it indicates that investors are hesitant to buy the digital asset. Without any buying pressure, the supply of ETH on the market continues to outpace demand, removing scarcity and resulting in a price drop.

As a result, ETH is on a risky path heading into the next bear market. Failure to establish any kind of support means that Ethereum will not hold up against any type of resistance, pushing it even lower as bears gain control.

Ethereum may revisit $2,500 in the near future.  For investors, especially those who are long digital assets, the $2,500 price level is a dreaded price level.

This would bring the cryptocurrency’s value below half of its all-time high, signaling the start of a new bear trend.  So far, Ethereum has managed to hold off the bears and maintain its position above this price point, but with momentum at an all-time low, it’s more likely that ETH will hit $2,500 before making any significant gains.

What happens when support is lacking?  Due to the lack of support, the next support level, $2,522, will be unable to stand up to the pressure, leaving the position vulnerable.

ETH is currently trading above $2,600, but if it falls below that level, it will retest this next support level.  The first test at this level is expected to be successful for bears. If this is the case, Ethereum will most likely test the $2,400 mark much sooner than investors would like.

Positions like this, on the other hand, present a buying opportunity, so investors may want to start packing their belongings now.  In that case, ETH could be preparing to retest $2,771 as its first resistance level above $2,600.

 

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Maheen Hernandez

A finance graduate, Maheen Hernandez has been drawn to cryptocurrencies ever since Bitcoin first emerged in 2009. Nearly a decade later, Maheen is actively working to spread awareness about cryptocurrencies as well as their impact on the traditional currencies. Appreciate the work? Send a tip to: 0x75395Ea9a42d2742E8d0C798068DeF3590C5Faa5

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