Ethereum is at a historic inflection point in its development as the second largest cryptocurrency by market cap. Currently it is coiling between crucial support and resistance lines. Ethereum went through a crazy weekend, with an ~$8 price crash. Its next step may well decide its short-term direction of travel. The digital asset’s fight to find a way further underscores the cloudy haze of mystery that is consuming the crypto industry at large.
Recent Price Volatility
As most people know, over the weekend Ethereum had a big price drop, dropping from 2500 to 2150. This sudden drop took a heavy toll on investor sentiment, causing a wave of retrenchment and resulting in a surge of pessimism about the cryptocurrency’s short-term future.
Yet, after the crash, Ethereum proved its mettle by recovering remarkably from the slump. Since then, the price has shot back up by more than 10%. This recent surge has blasted it above important support levels that were recently tested.
Key Support and Resistance Levels
Right now, the first major resistance level for Ethereum lies at $2,800. A more successful and convincing breakout well above this threshold could be the key indicator of renewed bullish momentum and possibly even the first step toward further bullish gains.
Of these thresholds, the $2,400 level is particularly notable as a key line of demarcation. As shown, it served as a major support area for Ethereum in the past. Should the price break below this level, a collapse may bring Ethereum back to lows near the $2,000 mark.
Market Indecision and Potential Scenarios
Ethereum’s price action has behaved like a risk-on asset with price swings that have been volatile and erratic. The cryptocurrency has yet to take any clear direction from here. This paralysis demonstrates the buyer/seller conflict that persists as the market continues to contend with uncertainty.
A breakout from Ethereum’s prevailing range could send it back up toward the $2,800 resistance, bringing bullish sentiment with it. On the other hand, a crash below support might confirm a rejection of higher prices and perhaps even trigger a larger scale sell-off.
