U.Today - The second-largest cryptocurrency by market capitalization, Ethereum, is exhibiting warning indicators as it tries to regain stability above crucial support levels. ETH is now trading at about $1,960, having dropped sharply from its peak of about $4,000 earlier in this cycle. Technical indicators now indicate that a decline below $1,000 might be imminent for the first time in almost three years.
Since January, the price chart has consistently shown a downward trend, with ETH marking lower highs and lower lows. Bearish momentum is further cemented by the recent rejection from the $1,850-$2,000 resistance range. The fact that the asset is currently trading below the 50, 100 and 200-day EMAs — all of which have evolved into dynamic resistance zones — is even more concerning.
Growing selling pressure is indicated by the Relative Strength Index (RSI), which is hovering close to oversold territory. Although there have been short-term rallies, ETH has not been able to establish long-term bullish momentum. The market's bearish tone is further supported by volume spikes during recent sell-offs.
ETH may test its long-standing psychological support near $1,000 if market conditions deteriorate, whether as a result of macroeconomic instability, a decline in Bitcoin or a general risk-off atmosphere. An acceleration of panic selling could push ETH toward deeper support levels between $800 and $900 if this level is breached.
A double-bottom pattern could be formed by ETH finding a floor between $1,500 and $1,600. An effective rebound here might pave the way for a relief rally back to $2,000+, particularly if it is accompanied by a rise in volume and a more general market recovery.
Shiba Inu stays resilient
A short-term recovery may be possible because Shiba Inu is exhibiting a surprisingly high degree of resilience in spite of general market uncertainty. SHIB has recovered with growing momentum after teasing a break below the crucial support at $0.000011, and it is currently trading at about $0.000012.This upward movement could be the beginning of a trend reversal, which would be very important for the meme asset. The significant increase in volume, which indicates increased investor interest and renewed demand at these lower levels, is the most obvious indication of strength.
A breakdown that might have added another zero to the asset's price was avoided by traders defending this zone, as evidenced by the uptick in volume, which is frequently a leading indicator of momentum in the case of SHIB. SHIB is technically testing the resistance range between $0.0000124 and $0.0000130.
A move above this region would indicate a break out of the local downtrend and might lead to the $0.0000155 and $0.0000171 levels, which are both surrounded by moving average resistance levels. The Relative Strength Index (RSI), which is currently trading just under 45 after rising from oversold territory, likewise lends credence to the bullish argument. This change suggests that sentiment is improving without becoming overly optimistic, which allows for more upside without becoming exhausted right away.
The market structure would change significantly, and there would probably be more buying interest if SHIB could push above $0.0000130 on high volume. If this is not done, it might return to the $0.000011 support, but the recent strength and volume increase indicate that bulls are in control, at least for the time being.
Bitcoin at crossroads
The market is waiting for a possible death cross as Bitcoin stands at a technical crossroads. Recent price action suggests that the worst may still be averted, though. Bitcoin is currently pushing against important moving averages after making a strong comeback from below $78,000 and rising back above $81,000.In a classic death cross pattern, which traditionally indicates bearish momentum, the 50-day moving average is approaching the 200-day moving average from above. However, the decision is not yet finalized. The ability of Bitcoin to recover the $85,000 barrier is now crucial. The bearish crossover would be nullified and the trend would show fresh strength if there were a sustained move above this level.
Indeed a breakout of this kind might change the market's perspective, transforming the death cross from a long-term downtrend confirmation into a possible bear trap. The fact that the RSI has recovered from oversold territory and is currently above 43, indicating improving momentum and potential for further upside, supports the bullish argument.
During the most recent recovery, volume also experienced a healthy spike, which is another positive indication of accumulation rather than distribution. Still, prudence is necessary. A retest of the $75,000 zone or even lower could be possible if the price of Bitcoin fails to rise above $85,000, which would probably mean a death cross.