The global financial environment is currently in turmoil, with the Bank of Japan’s rate hike acting as a catalyst for massive selloffs across markets. Cryptocurrencies such as Bitcoin and Ethereum are not immune to these broader macroeconomic forces, and investors should brace for potential further downside.
The situation with the second largest cryptocurrency, Ethereum, is also concerning. Ethereum is currently testing support levels that have been in place for several years and is bouncing off this critical level while facing massive selling pressure.
Crypto World analyst Josh said that looking at Ethereum over a three-day period, the recent decline was clearly following a bearish signal. The defining moment was when Ethereum fell below the $2,800 level, triggering a significant selloff across the market. Currently, Ethereum is sitting at the 50% retracement level around $2,200, providing short-term support after the sharp decline. However, despite a bounce from the “golden pocket” support zone between $2,100 and $2,200, the overall trend remains bearish.
Looking at Ethereum’s 3-day RSI, it is approaching oversold territory, a situation we haven’t seen since September of last year, which coincides with a local low. On a weekly basis, Ethereum is showing resilience, bouncing off several key support areas, including the long-term uptrend line around $2,100. This confluence of support suggests that Ethereum is unlikely to fall further in the short term, potentially marking a local bottom.
For Solana, analysts observed a similar pattern, with the price hovering above the important support area between $120 and $128. Despite a brief dip below this support area, the daily RSI suggests Solana may have found a local low, similar to Ethereum and Bitcoin. However, there is still significant resistance around $153, $159, $170, and $183, making a short-term recovery difficult.