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This alignment with a critical Fibonacci level suggests a potential exhaustion of the downtrend, especially as the daily Relative Strength Index (RSI) exhibits a pronounced bullish divergence, historically indicative of an impending trend reversal.
Despite this promising support level, Ethereum remains firmly confined within the descending channel, struggling to establish a definitive breakout. The primary resistance level to watch stands at $2,503, aligning with the 0.5 Fibonacci retracement of the preceding decline.
A breakout above this zone would serve as a strong validation for bullish momentum, potentially driving ETH towards $2,881 (0.382 Fibonacci) and eventually to $3,078, which marks a previous structural resistance level.
The RSI remains oversold but has begun showing early signs of recovery, suggesting that a relief rally could be in the making. However, bullish confirmation requires sustained price action above $2,503.
Conversely, failure to hold above $2,125 would put Ethereum at risk of deeper losses, potentially revisiting the $1,586 support, which coincides with the 0.786 Fibonacci retracement. This zone would act as a last line of defense against a prolonged bearish phase, and its loss could trigger further downside pressure.
ETH Price Prediction
On the hourly timeframe, Ethereum’s price action suggests the early development of a potential five-wave impulsive recovery. After falling towards the $2,125 level, price action is beginning to carve out an initial recovery wave (i), followed by a corrective wave (ii).
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