After bouncing +57% from Wednesday’s low, the Ethereum price crash looked to be over. ETH is sliding again and is back at a critical support level.
We all know what happened on Wednesday but what comes next is equally important. The Ethereum price is looking incredibly weak and may soon be back below $2000, for the second time in a week.
Just 10 days ago, with the price at $4,400, traders (myself included) were expecting ETH to cross the $5,000 threshold soon.
It wasn’t an overly optimistic expectation, considering the Ethereum price had increased by $2,250 in the month leading up to it.
At the moment, $1,600 looks more likely than $5,000. If the price closes below the 100-day Moving average at $2,264, we might be there sooner rather than later.
Just below the 100-day average, there is a trend line at $2,190. The trend was broken in Wednesday’s sell-off and again yesterday. However, both times the price managed to close above the trend.
Since the recent ETH bull run began in November 2020, the price has never closed below the 100-day average or the trend line. Therefore, I would consider a failure to do so today to add to the negative sentiment.
Ethereum Price Outlook
The price is facing a tough test here. If ETH extends lower through the crucial support levels, it could potentially lose another -30%.
This would see the Ethereum price at $1,600, where it should find support. The 200-day MA is at $1,573. This is the more important, if not the most important moving average.
If the price trades below the 200-day, it is considered to be in a long-term downtrend. Additionally, horizontal support is seen at the March low 0f $1,550.
$1,550-$1,600 would be a major support area and would undoubtedly bring large volume buying.
It’s not all bad news. If the Ethereum price manages to close above the 100-day MA, it may have found the floor the bulls so desperately need.