Ethereum Stays Below a Downside Resistance Line

ETH/USD has been in a recovery mode since Tuesday, when it hit support at 1710. However, although it is getting closer at the downside resistance line drawn from the high of June 3^rd, it remains below it, which in our view, keeps the prospect of the bears taking charge again well on the table. Therefore, we would still see a cautiously negative outlook.

If the bears are able to regain control from near the aforementioned downside line and push the action back below 2035, we may then see them pushing towards the 1845 barrier, the break of which could aim for the 1710 hurdle, marked by Tuesday’s low. Another break, below 1710, would confirm a forthcoming lower low and may extend the fall towards the 1545 area, near the lows of March 24^th and 25^th.

Looking at our short-term oscillators, we see that the RSI turned down after hitting its 70 line, while the MACD, although above both its zero and trigger lines, show signs of topping. Both indicators suggest that the current recovery is running out of steam, which somewhat increases the chances for the bears to take control again at some point soon.

Now, in order to abandon the bearish case, we would prefer to see a break above 2182, the peak of July 9^th. This will also take the crypto above the downside resistance line drawn from the high of June 3^rd, and may encourage the bulls to climb toward the peak of July 7^th, at around 2405. If they are not willing to stop there, we could then see them setting the stage for a test near the 2635 area, which acted as a strong resistance on June 15^th.

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