Bulls swooped in to buy Ethereum as it dropped to a critical support level and now they’ve set their sights on $590.
Bitcoin’s Dec.8 breakdown to $17,650 weighed heavily on most altcoins and Ether was not spared from the carnage.
As the price of Bitcoin (BTC) dropped precariously close to a large CME gap at $17,000, Ether (ETH) price fell below the 20-MA to $529. At this level, Ether became oversold on RSI and the bounce from that region was strong enough to bring the price back to the 20-MA.
At the time of writing the 20-MA is functioning as a short-term resistance and above it, at $582 there is a high volume node on the volume profile visible range.
Even if Ether is able to flip the 20-MA back to support, it’s expected that the zone from $583 to $600 will function as resistance, unless Bitcoin price surges through the $19,500 level. Although, this seems unlikely as BTC may have its own battle pushing through $18,800 to $19,150.
A few positives for Ether are the 4-hour RSI is on the verge of pushing through the midline and the MACD is en-route to converge with the signal line. The MACD histogram also shows a reduction in sell pressure but traders will note that buy volume is tapering off as the price approaches the 20-MA.
Given the relationship between Bitcoin’s price action and that of altcoins, today’s daily close for BTC will be something to watch. Currently, BTC price is attempting to recapture the $18,500 level but a close above the 100-MA at $18,600 would be preferable.
A close above the 100-MA would give hope to traders looking for the price to retest the 20-MA at $18,800 and set the stage for the digital asset to push through the $18,800 to $19,150 area.
Bulls look ready to retake $590
For the short-term, traders can at least breathe a sigh of relief since Ether held above the $521 support which prevented the price from breaking down to $475.
Aside from needing to recapture the 20-MA, there is minimal overhead resistance until the price reaches the descending trendline which is aligned with the $583 to $600 resistance cluster.
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