Ether (ETH), the second largest cryptocurrency by market capitalization, recently saw its price drop below its 4-hour basic moving average (SMA). This technical development is worth the attention of traders and investors because the 4-hour SMA is often used to measure short-term market dynamics.

When the price of a cryptocurrency falls below this moving average, it may signal a potential shift in market sentiment from bullish to bullish. bearish. This may mean increased selling pressure and a possible continuation of the downward trend. The implications of this price movement go beyond technical analysis, as broader market conditions, investor behavior, and fundamentals also play a key role in shaping Ethereum’s future trajectory.

In this article, we will explore ETH’s potential price action using technical indicators.

Ethereum price status on the 4-hour chart

Firstly, it can be observed that the ETH price on a 4-hour time horizon experienced a drop below the 100-day SMA after moving in a consolidation manner for some time. It is essential to note that in most cases, when the value of an asset falls below the SMA, this may indicate this short- or long-term movement in this direction.

Additionally, the Relative Strength Index (RSI) also confirms that Ethereum may move in a downward direction for a while as the RSI line has crossed below 50% and may trend in that direction for some time.

On the daily chart, you can see that Ethereum is trying to make a move towards the 100-day SMA after the previous day’s bearish candle decline. At this point, a drop in ETH may be suggested to test the 100-day SMA before moving higher again.

Finally, the RSI line from the RSI indication is currently breaking out of the overbought zone towards the 50%, which indicates that ETH still has room to move lower.

ETH price projection

Right now, Ethereum is trying to move lower towards the daily SMA. If it falls below, it will continue to decline towards the $2,865 support level. Moreover, it could drop further to test the $2,147 support level if it breaks below the above-mentioned level.

However, if the ETH price touches the SMA and bounces, the ETH price will move higher towards the resistance level at $4,099. Moreover, if the stock breaks below this resistance level, it will continue to move higher, testing the $4,863 level. ETH it could move to create a fresh high if it rises above the $4,863 level.

At the time of writing, ETH was trading at around $3,694 and up 0.41% with a market capitalization of over $443 billion and a 24-hour trading volume of over $18 billion. The company’s market capitalization decreased by 2.97% over the last day, and its trading volume increased by 39.28%.

Featured image from iStock, chart from Tradingview.com