Ethereum Holds Critical Support But Faces Uncertainty at Resistance, Analyst Says ETH Could Go As Low As This Level Before Halving

January 22, 2024

Ethereum Holds Critical Support But Faces Uncertainty at Resistance, Analyst Says ETH Could Go As Low As This Level Before Halving

Ethereum currently finds itself at a critical inflection zone from both a short-term and long-term perspective. According to crypto trader Ali, ETH is testing key support between $2,388 and $2,460. As long as this demand zone holds, Ali sees a “clear path ahead with minimal resistance” for Ethereum to trend higher.

However, trader David points out that Ethereum also faces major historical resistance around $2,700. This area aligns with the highs from last June, when ETH stalled out and reversed lower. David notes that ETH did manage to break its monthly resistance at $2,700 earlier this month. However, sustaining above this level has proven difficult.

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Monthly Close Could Set Long-Term Trend

Importantly, David is monitoring how Ethereum closes on a monthly basis relative to the $2,725 and $1,934 levels. A monthly close above $2,725 would confirm a macro breakout and support a rally to $3,500. However, failure to hold above $2,725 would open the door for a deeper “monthly retest” of the $1,934 area below the halving.

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So in summary, the bullish and bearish cases hang in a delicate balance at current levels. Holding the demand zone noted by Ali between $2,388 and $2,460 could fuel a relief rally and build cause for upside momentum. But if the bears resurface, Ethereum remains vulnerable to revisiting the $2,000 level and possibly lower, based on the analysis from David.

Near-term price action is inherently difficult to predict in volatile crypto markets. However, monitoring critical technical levels often provides an edge. With Ethereum straddling major long-term support and resistance, its next directional move could set the tone for trend progression over the subsequent months and quarters.