Coming out of weeks of downtrend, the Ethereum price could be looking to establish the next bottom as it sets up for a campaign toward new all-time highs. This is highlighted by crypto analyst MMBTtrader, who explained that the Ethereum price crash could be coming to an end. This is evidenced by a number of formations on the Ethereum price chart that suggest where the next lift-off might begin.
Ethereum Price Is Testing The Next Major Support
In an analysis shared on the TradingView website, the crypto analyst explained that the Ethereum price is now testing the next crucial technical level. The importance of this level comes with a 50% retracement of the Fibonacci sequence. Thus, it means that the Ethereum price is seeing major support at this level.
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This support lies just above the $3,200 level, which the Ethereum price had managed to maintain through the market crash. This puts the critical level at the 0.5 Fibonacci support, which currently serves as the next make-or-break level for the cryptocurrency.
If the Ethereum price is able to bounce off from here, then it could trigger the next wave of recoveries for the cryptocurrency. Not only that, it would be the signal that the bottom is finally in and the crash is over. The analyst further explains that this could lead to “a high-probability setup for a resumption of the primary bullish trend.”
Such a breakout would lead to a rather strong bullish move for the digital asset, and the target from here would be a brand new all-time high. The first target from here would be $5,500 as bulls push the price higher. “This target is derived from the magnitude of the prior uptrend and represents a key resistance zone on the higher timeframes,” the analyst explained.
The Bearish Side Of The Coin
The 0.5 Fibonacci level, as explained above, is a make-or-break level. This means that whichever direction the Ethereum price takes after hitting this level could determine where the cryptocurrency is headed next. With the bullish side already explored, there is still the possibility that Ethereum fails to establish support and a bottom.
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In the event of the Ethereum price actually breaking below this crucial level, then it would confirm the bearish pressure that has plagued the market. The analyst highlights on the chart that if the support breaks, then Ethereum could dump further below $3,000, with the major support lying just above $2,400.
Such a decline would mean an over 30% crash for Ethereum, on top of the already struggling price. Therefore, it is imperative that bulls hold above $3,200 to prevent further decline.
Featured image created with Dall.E, chart from Tradingview.com