ETH/USD Forecast: Much Needed Correction Underway
|The ETH/USD pair corrected lower sharply after completing a bullish structure near $400.00.|
|There was a break below a crucial bullish trend line at $350.00 on the 4-hour chart.|
|The ETH/BTC pair is stable since Bitcoin price also declined with the same pace as of Ether.|
Technically, the 12-hour chart indicators started correcting extreme overbought readings for the first time this month.
Ether Price Downsides Remain Supported
Yesterday, we discussed the chances of ETH/USD overtaking $395.00 to extend gains above the $400.00 level. However, the pair failed to gain momentum and declined below the trend lines with support near $375.00 on the hourly chart.
It opened the doors for a short-term bearish bias and the pair extended decline below a key bullish trend line at $350.00 on the 4-hour chart.
During the downside, Ether sellers were able to break the 50% Fibonacci retracement level of the wave from the $248.00 low to $414.00 high. It means that the pair has started a correction phase below $350.00.
In my view, the current correction was much needed. All-important technical indicators on the timeframes such as H12, Daily and weekly were in extreme overbought conditions.
The recent dip has cooled things, and the pair is now shaping up well. At the moment, the $300.00 handle is preventing declines. Below $300.00, the next major support lies at $260.00-250.00.
The $250.00 area is a decisive support and monthly pivot. Any declines towards $250.00 should face strong buying interest.
Looking at the 12-hour chart of ETH/USD, the pair is currently attempting a close below a significant support trend line at $300.00. A successful close below the trend line support may spark more losses towards $250.00.
Overall, the current correction structure is positive so far. We need to keep monitoring two important supports - $300.00 and $250.00. As long as the price is above these levels, the medium to long term bias remains bullish.