The last three days for Ethereum have been brutal. After capturing a position above its previous high of $637 for 48 hours, the asset has depreciated strongly and dropped briefly under $600 over the past day. Currently valued at $602, Ethereum faces its previous resistance again at $637 and over the next few days, it may struggle to breach it.
Ethereum 1-day chart
Source: ETH/USD on Trading View
On the 1-day chart, Ethereum registered a bearish breakout during the start of December but since then it has been able to register a direct bounce-back from support at $540. The pullback was considerable as Ethereum managed to claim another 2020 high, surpassing its previous top at $637.
After breaching above $637, the 48-hours were extremely positive as a consolidation above the immediate support solidified the rally. However, over the past three days, there has been a strong correction. Currently at its consolidation range, as witnessed since mid-November, Ethereum might need a bit of effort to break above $637 in the current week.
However, there were a few positives.
Market Rationale
Source: ETH/USD on Trading View
Firstly, the EMA ribbons on the 1-day chart, are indicative of a volatile price movement. Hence, the current price position might not be strong. With the 50-Moving Average acting as underlying support, the rally is still bullish according to the long-term market structure.
Relative Strength Index or RSI is currently, dictated by the selling pressure in the charts but as we move forward, recovery from the average rating of 50 may manifest, according to past 30-day data.
Awesome Oscillator remains under bearish control but the red candles are now starting to drop in the chart.
Conclusion
With respect to its immediate price, Ethereum may face a little bit of resistance to breach above $637, but another flash hike is all its needs to recover a position above the resistance.
