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Bulls swooped in to buy Ethereum as it dropped to a critical support level and now they’ve set their sights on $590.
MARKET UPDATE
Bitcoin’s Dec.8 breakdown to $17,650 weighed heavily on most altcoins and Ether was not spared from the carnage.
Daily cryptocurrency market performance. Source: Coin360
As the price of Bitcoin (BTC) dropped precariously close to a large CME gap at $17,000, Ether (ETH) price fell below the 20-MA to $529. At this level, Ether became oversold on RSI and the bounce from that region was strong enough to bring the price back to the 20-MA.
ETH/USDT 4-hour chart. Source: TradingView
At the time of writing the 20-MA is functioning as a short-term resistance and above it, at $582 there is a high volume node on the volume profile visible range.
Even if Ether is able to flip the 20-MA back to support, it’s expected that the zone from $583 to $600 will function as resistance, unless Bitcoin price surges through the $19,500 level. Although, this seems unlikely as BTC may have its own battle pushing through $18,800 to $19,150.
A few positives for Ether are the 4-hour RSI is on the verge of pushing through the midline and the MACD is en-route to converge with the signal line. The MACD histogram also shows a reduction in sell pressure but traders will note that buy volume is tapering off as the price approaches the 20-MA.
Given the relationship between Bitcoin’s price action and that of altcoins, today’s daily close for BTC will be something to watch. Currently, BTC price is attempting to recapture the $18,500 level but a close above the 100-MA at $18,600 would be preferable.
A close above the 100-MA would give hope to traders looking for the price to retest the 20-MA at $18,800 and set the stage for the digital asset to push through the $18,800 to $19,150 area.
For the short-term, traders can at least breathe a sigh of relief since Ether held above the $521 support which prevented the price from breaking down to $475.
Aside from needing to recapture the 20-MA, there is minimal overhead resistance until the price reaches the descending trendline which is aligned with the $583 to $600 resistance cluster.
By Ray Salmond from Cointelegraph
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
