Ethereum has faced intense selling pressure over the past few weeks, with its price falling below the $2,000 threshold. This decline saw the cryptocurrency reach a low of $1,750 on March 11, marking its lowest point since November 2023. Despite this steep drop, a new technical setup suggests Ethereum could be on the verge of a bullish turnaround, as it now retests a key resistance level on the 4-hour chart.
Ethereum's price action has been characterized by downtrends, primarily fueled by many investors exiting their positions since the beginning of March. As such, Ethereum broke below $2,000 on March 10 after support failed to hold and has spent the past week trading below this critical level. However, after sinking to $1,750, Ethereum has shown signs of a recovery and has now rebounded to around $1,900.
This recovery has brought the cryptocurrency back to a downward-sloping resistance trendline, a level that has historically acted as a barrier to upward movements during the recent downtrend. The test of this resistance now presents a potential breakout scenario where bullish momentum could flow into Ethereum. An analyst on TradingView highlighted this setup, noting that a breakout above this resistance trendline could open the doors for a significant rally above $2,000.
Despite the prevailing bearish sentiment that continues to weigh heavily on the broader crypto market, the TradingView analyst identified a bullish trade setup on Ethereum’s 4-hour candlestick chart. This analysis suggests that despite the recent decline, there remains a degree of optimism among some analysts and investors who believe Ethereum could soon regain its bullish footing.
According to the analysis, "A confirmed breakout above $1,885 could serve as an ideal entry point." Currently, Ethereum is yet to break above the downward sloping resistance trendline, with the breakout point set just below the $2,000 mark. If Ethereum eventually breaks above this resistance, the analyst noted a probable price target of $2,596.
On the flip side, the analysis advises placing a stop loss at $1,700, meaning that the setup is structured to manage risk while aiming for substantial gains. This approach is crucial in case the bearish momentum proves too challenging to overcome, which could lead to a further decline if the Ethereum price gets rejected at the resistance trendline.
Given the high-risk reward ratio at play, the analyst suggested that investors should watch for a surge in volume, which would provide confirmation that Ethereum is breaking out with momentum. At the time of writing, Ethereum is trading at $1,895, and recent price action saw it reach an intra-day high of $1,950 before rejecting.
Despite the immediate rejection at this resistance level, Ethereum’s leading status among altcoins indicates potential for further bullish shifts, especially as it continues to hover around significant resistance points. The cryptocurrency market, while volatile, still presents opportunities for profitable trades when analysis and strategy are effectively implemented.
As March progresses, there is a chance for a push upward in the next 48 hours, as traders and analysts keep a close eye on the resistance trendline and the volume patterns accompanying Ethereum's price movements.
Ultimately, whether Ethereum will break through and sustain a rally is uncertain, but the technical indicators are suggesting there is still a fight left in this cryptocurrency yet.
