Ethereum Retraces to an Oversold Region as Bulls Defend the Critical Support at $4,250

Ethereum Retraces to an Oversold Region as Bulls Defend the Critical Support at $4,250

Ethereum (ETH) has been in a downtrend since November 9 after being rejected at the high of $4,820. Today, the largest altcoin has fallen to the low of $4,250.

The current price level is below the 21-day moving average but above the 50-day moving average. At this price level, buyers and sellers could try to take advantage of the price movement. If Ether continues to fall and the price breaks below the 50-day moving average line, the downtrend will likely resume. The cryptocurrency will fall to the low of $3,800. However, if the current support at $4,250 holds, buyers will try to push the cryptocurrency above the 21-day moving average line. ETH/USD will start a new uptrend if buyers cross the 21-day moving average line. On the other hand, Ethereum will move in a trading range if the 21-day line or the 50-day moving average remains unbroken. 

Ethereum indicator analysis 

The cryptocurrency has fallen to the 48 level of the Relative Strength Index for the 14 period. Ether has fallen into the downtrend zone and is capable of further downward movement. Moreover, the market has fallen below 20% of the daily stochastic. ETH/USD has reached the oversold area of the market. Selling pressure is likely to end as we expect buyers to emerge in the oversold region.

Technical indicators:  
Major Resistance Levels - $4,500 and $5,000
Major Support Levels - $3,500 and $3,000 

What is the next direction for Ethereum? 

On the 4-hour chart, Ethereum is in a downtrend. The altcoin has fallen and dropped below the moving averages. Bearish momentum has extended below the previous low at $4,510. Meanwhile, the uptrend from November 12 has retraced a candlestick that tested the 50% Fibonacci retracement level. The retracement suggests that Ethereum will fall to the 2.0 Fibonacci extension level or $4,234. 

Disclaimer. This analysis and forecast are the personal opinions of the author and are not a recommendation to buy or sell cryptocurrency and should not be viewed as an endorsement by CoinIdol. Readers should do their research before investing funds.