Bitcoin has fallen almost 19% from short-term highs at $ 52,000, and Ethereum has also registered a similar decline of around 23% from local highs at $ 4,121. Ethereum buyers have gone to great lengths, but to no avail, to break through the $ 3,800 zone over the past week. This attempt was unequivocally rejected, and Ethereum sank below another area of demand at $ 3,300- $ 3,400.
The $3800 area, and the $3770 support level, were important levels for Ethereum, but the price tanked hard through these levels in recent days. This was accompanied by Bitcoin breaking through beneath the short-term range lows at $45.8k.
In September 2021, Ethereum rebounded between the levels of $ 3,157 and $ 2,800 for a week and a half, before rising once again. It was something that could be repeated.
The 50% Fibonacci retracement level, based on an ETH move from $1706 to $4868, appeared to have been flipped from support to resistance. The demand area at $3300 (cyan box) was broken on heavy trading volume, and the bearish retest could see ETH sink.
Shorter-term (white) Fib levels presented $ 3,136 and $ 2,928 as extension levels where ETH could potentially stop this downward movement. The $ 2928 level had a confluence with the other set of retracement levels ($ 2913), as well as higher time support at $ 2990 and $ 2823.
Rationale
The RSI sank below 20 the day prior to press time and formed a higher low a few hours earlier while the price made a lower low. This was not a bullish divergence as the time period between was 23 periods, exceeding 14.
The OBV was steadily declining, confirming that sell volume was behind the move for ETH. The Supertrend indicator also showed a sell signal and indicated that the $ 3,300 area was a place where good R: R shorts could possibly be opened.
Conclusion
The cluster of significant levels in the $2800-$2900 area marked it as strong support for ETH. The flip of $3300 from demand to supply could occur in the near term, and over the next couple of days, Ethereum could retest $3300 and sink toward $2800-$2900 in search of demand.
