Ethereum shot up on Monday, extending the recovery staged from the anchor at $1,550. The rally was supported by news that Visa has added support for cryptocurrency transactions due to increasing customer demand. Ethereum stood out because the USDC digital currency chosen executes on its blockchain.
Several technical hurdles were pushed into the rearview mirror with Ethereum eying highs past $1,800. A break occurred above this critical resistance zone but a weekly high formed around $1,840, cutting the recovery mission.
At the time of writing, Ether is pivotal at $1,800, but the least resistance path appears to be on the downside as technicals gradually flip negative. Overhead pressure is likely to increase at $1,800, forcing Ether to seek refuge toward the confluence support at $1,700, formed by the 50 Simple Moving Average (SMA) and the 200 SMA on the 4-hour chart.
ETH/USD 4-hour chart
A comprehensive look at the 4-hour chart illustrates Ethereum printing a V-shaped recovery. Note that a comeback such as this not easy to sustain and often leads to a correction. The Moving Average Convergence Divergence (MACD) brings to light a bullish front that is currently getting exhausted.
The indicator is in the positive region but has slowed down the momentum. Traders should be on the lookout for MACD line (blue) crossing under the signal line. The move will imply that it is time to sell the weekly top and speculate losses toward $1,700. If support at this area fails to hold, Ether may freefall toward last week’s anchor zone at $1,550.
Ethereum intraday levels
Spot rate: $1,795
Trend: Bearish
Volatility: Low
Support: $1,700 and $1,550
Resistance: $1,800 and $1,840
