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- Ethereum’s $3,006 support is crucial—losing it could lead to a dip toward $2,850 before any recovery.
- Short-term bearish pressure persists as the 50-day moving average declines, while long-term trends remain within an ascending channel.
- Strong resistance above $4,200 may limit more upward movement, although breaking above $3,250 would bolster positive momentum.
Ethereum ($ETH) is experiencing volatility with prices circling $3,100. In light of a possible swing failure, analyst StefanB has cautioned traders who thought they had hit the bottom at $3,000 that they are not yet secure. In recent times, Ethereum has challenged the lower limit of an ascending parallel channel. However, a drop to $2,850 is probably in store if the price is unable to maintain support levels.
Technical Indicators Signal Possible Decline
Over the past few months, Ethereum’s price has shown a bullish trend moving within an ascending parallel channel. Despite this, the market has encountered short-term pressure. Currently, $ETH faces a critical support level near $3,006, marked by the Fibonacci retracement level of 0.618. Failure to hold above this area could trigger further downside movement. A potential liquidity zone between $2,850 and $2,900 may be tested before a possible recovery.
$ETH However you put it, longs that thought they caught bottom at 3000 are not safe.
— StefanB (@Stefan_B_Trades) February 2, 2025
Swing failure that pivot low most likely it's to happen.
If they want to panic everyone then we tap 2850 area. pic.twitter.com/qYRVA6lcdt
Short-term gloomy sentiment is also indicated by moving averages. While the 100- and 200-day moving averages remain unchanged, the 50-day moving average drifts lower. The price recently tested the lower boundary of this trendline, acting as a dynamic support. If $ETH manages to hold above $3,006, a reversal towards higher targets of $3,250 and $3,594 could be seen. However, if it breaks below this level, the next support could be found near $2,850.
Resistance and Key Levels to Watch
Ethereum’s resistance zone is still defined by the upper trendline of its ascending channel. This level remains a barrier, located around $4,200. A break above this level could shift the market sentiment to a bullish outlook. Furthermore, the price action suggests increased volatility, with $ETH nearing the lower Bollinger Band. Consequently, traders should watch for key price levels and moving averages to determine the next market direction.