Technically, the 6-hour chart indicators are back in bullish territory.
ETH/USD Bounces Back Sharply
We saw a major downside move in ETH/USD recently as it tumbled below the $700.00 and $600.00 support levels. However, the downside move was protected by the $500.00 support, which acted as a strong barrier for sellers.
Similarly, ETH/BTC also corrected lower below the 0.0500BTC support. The pair is now stable and is holding the 0.0450BTC support level.
Looking at the 6-hour chart of ETH/USD, there was a break below a crucial ascending channel support at $780.00. The pair dropped sharply and moved below the $700.00 and $600.00 support levels.
On a positive note, a key bullish trendline with current support at $540.00 is still valid. Moreover, the $500.00 support zone acted as a strong buy zone and prevented further declines. The pair is now moving higher and it is currently trading above the $650.00 level.
The current price action is positive above the 38.2 percent Fibonacci retracement level of the last decline from the $867.75 high to $487.64 low. However, the $700 level is currently acting as a resistance.
Moreover, Ether’s price is struggling to close above the 50 percent Fibonacci retracement level of the last decline from the $867.75 high to $487.64 low.
A successful close above the $700.00 pivot followed by a break of the $720.00 resistance is needed for a trend change in favor of buyers. Dropping down to the 2-hour chart of ETH/USD, the pair is showing numerous positive signs from the $487.64 swing low.
To sum up, Ether was rejected from the $500.00 support and is currently trading with a bullish bias versus the US Dollar and bitcoin.