Ethereum Drops Below 4-Hour SMA: Analyzing The Impact
June 08 2024 - 2:00PM
NEWSBTC
Ethereum (ETH), the second-largest cryptocurrency by market
capitalization, has recently seen its price fall below the 4-hour
Simple Moving Average (SMA). This technical development is
noteworthy for traders and investors, as the 4-hour SMA is often
used to gauge short-term market momentum. When a cryptocurrency’s
price drops below this moving average, it can signal a potential
shift in market sentiment from bullish to bearish. This could imply
increased selling pressure and a possible downward trend
continuation. The implications of this price movement extend beyond
technical analysis, as broader market conditions, investor
behavior, and fundamental factors also play a crucial role in
shaping Ethereum’s future trajectory. In this article, we will be
exploring ETH’s potential price action with the help of technical
indicators. Ethereum Price Condition On The 4-Hour Chart Firstly,
it can be observed that ETH’s price in the 4-hour timeframe has
experienced a drop below the 100-day SMA after moving in a
consolidation manner for a while. It should be noted that
most times when an asset drops below SMA, it could indicate a short
or long-term move in that direction. Additionally, the Relative
Strength Index (RSI) indicator also confirms that Ethereum might
move in the downward direction for a while as the RSI line has
crossed below 50% and could trend there for a while. From the daily
chart, it can be noticed that Ethereum is attempting to make a move
toward the 100-day SMA after dropping a bearish candlestick on the
previous day. At this point, it can be suggested ETH dropped to
test the 100-day SMA before making an upward move again. Finally,
the RSI line from the RSI indication is currently dropping out of
the overbought zone toward 50% indicating that there is still room
for ETH to move downward. ETH Price Projection As of right now,
Ethereum is attempting to move downward toward the daily SMA, If it
drops below, it will continue to move downward toward the $2,865
support level. Furthermore, it can drop even more to test the
$2,147 support level if it drops below the aforementioned level.
However, if ETH’s price touches the SMA and bounces back, it will
move upward toward the $4,099 resistance level. Also, should it
break below this resistance level, it will continue to move up to
test the $4,863 level. ETH may move to create a new high if it
rises above the $4,863 level. As of the time of writing, ETH’s
price was trading at around $3,694 and was up by 0.41% with a
market capitalization of over $443 billion and a 24-hour trading
volume of over $18 billion. Its market capitalization is down by
2.97%, while its trading volume is up by 39.28% in the past day.
Featured image from iStock, chart from Tradingview.com
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