Here’s Why Ethereum Could Dive Significantly Below 100 SMA

Ethereum is trading in a contracting range below the $175 resistance against the US Dollar. ETH price seems to be setting up for the next move either above $200 or towards $152.

• Ethereum is facing a strong resistance near the $172 and $175 levels.
• The 100 hourly simple moving average at $165 is likely to act as a strong support and breakdown zone.
• There is a crucial contracting triangle forming with resistance near $172 on the hourly chart of ETH/USD (data feed via SimpleFX).
• The pair could either rally above $175 or it might decline significantly below the 100 hourly SMA.

Ethereum Price Holding 100 Hourly SMA

After forming a swing high near the $175 level, Ethereum started trading in a contracting range against the US Dollar. ETH price corrected a few points and traded below the $170 level.

The bears pushed the price below the 23.6% Fib retracement level of the upward move from the $138 swing low to $175 high. However, the $160-$161 zone acted as a strong support for the bulls. It seems like the 38.2% Fib retracement level of the upward move from the $138 swing low to $175 high also provided support. As a result, the price started trading in a contracting range above the $160 support. At the moment, Ethereum is trading near the $165 level and the 100 hourly simple moving average. There is also a crucial contracting triangle forming with resistance near $172 on the hourly of ETH/USD.

The triangle support and the 100 hourly SMA are important barriers for the bears. If they succeed in clearing the 100 hourly SMA, the price might even dive below the $160 support. The next major support is visible near the $152 level. Any further losses may perhaps lead the price towards the $144 support.

Chances of an Upside Break

On the upside, there are key hurdles forming near the $172 and $175 levels. A clear break above the triangle resistance and then a follow up move above the $175 barrier is needed for a sustained upward move.

The next key resistance is near the $180 level, above which the bulls are likely to aim a test of the $188 level. The final target for the bulls above $175 might be the $200 handle in the near term.

Technical Indicators

Hourly MACD – The MACD for ETH/USD is slowly gaining pace in the bearish zone.

Hourly RSI – The RSI for ETH/USD is now well below the 50 level.

Major Support Level – $165 Major Resistance Level – $175