Ethereum tests key Fibonacci support within a broader downtrend as RSI and Stochastic RSI flash oversold signals, leaving both rebound and further downside in play.
Summary
- ETH is rejecting a descending trendline and retesting the 0.786 Fibonacci retracement, with lower horizontal supports if this level fails.
- Sideways action since early 2024 means a break of the downtrend plus a higher low could open a move toward prior highs.
- RSI and Stochastic RSI are oversold, but the analysis stresses downside risk, stop-loss discipline, and waiting for breakout confirmation before new longs.
Ethereum has declined from recent highs and is testing critical support levels, according to technical analysis.
The cryptocurrency’s 12-hour chart shows the price has retreated from its recent peak and reached the 0.786 Fibonacci retracement level, the analysis stated. The price has failed to break through a descending trendline, with the most recent decline originating from that technical barrier.
Should the 0.786 Fibonacci level fail to hold as support, additional horizontal support exists at lower price points.
Will Ethereum price test a local bottom?
On the daily timeframe, Ethereum (ETH) has traded in a sideways pattern since the beginning of 2024, according to the technical review. A break above the downtrend line combined with a higher low formation could signal a potential move back toward previous highs, the analysis suggested.
The Relative Strength Index (RSI) indicator shows a descending trendline, with a break above that line potentially corresponding to upward price movement. Meanwhile, Bitcoin (BTC) is also entering a period of uncertainty as the original cryptocurrency falters alongside the broader crypto market on Dec. 1.
Entering long positions during periods of negative market sentiment carries risk some traders view such conditions as potential buying opportunities.Yet further downside remains possible and recommended employing stop-loss orders near support levels for risk management.
Alternatively, traders could wait for confirmation of a breakout above the descending trendline before entering positions, the analysis stated. The Stochastic RSI indicators have reached oversold levels, according to the technical review.
The original analysis included a disclaimer stating the information is provided for informational purposes only and is not intended as legal, tax, investment, financial or other advice.
Source: https://crypto.news/ethereum-price-will-support-hold-or-break-below-2-8k/
