Ethereum‘s price witnessed selling pressure making its way to the market and pulling the value of the digital asset down by 16% within 16-hours. This devaluation was from $3,851 to $3,214. However, the stumbling price found some strength to recover and was currently trading at $3,501 with a market capitalization of $396.78 billion.
Ethereum hourly chart
Source: ETHUSD on TradingView
The Ethereum chart indicated that the asset had slumped to the early May levels since the correction set in. The value of ETH dropped to support at $3,218 which was strong support earlier in the month.
As the price bounced back from this support, ETH was now heading towards immediate resistance at $3,522. However, the asset may not be able to surpass this level and may consolidate between $3,347 and $3,522.
Reasoning
The signs of price consolidation were visible in the market. Bollinger bands after being diverted for a long time were now looking to converge. This was a sign of the reducing volatility in the market. Meanwhile, the signal line that had resided above the candlesticks, was now heading lower suggesting the price could trend lower.
Nevertheless, traders were trying to push the ETH market towards equilibrium. The relative strength index that was pushed down to the oversold zone was now trying to attain equilibrium as the buying pressure increased. At the time of writing, the indicator’s value was 49 – almost at a balanced state- this suggested that the buying and the selling pressures had evened now. However, the momentum has remained low and negative.
Conclusion
The Ethereum market has been seeing strong volatility push its value lower. As the digital asset recovers from this loss, the market may continue trading at the current price level as the buying and the selling pressures were leveled. ETH may test immediate resistance at $3,591 soon, but might remain under this level.
