Ethereum Breaks Through 50% Retracement of Decline...Is It Really 'Recovering' Now?

▲ Ethereum (ETH)/ChatGPT Generated Image

Ethereum (ETH) has begun to establish a support base above the $2,120 mark, entering a full-fledged recovery trend.

According to NewsBTC, a specialized virtual asset media outlet, on May 22 (local time), Ethereum initiated a short-term rebound after confirming a bottom above the $2,125 range. Ethereum's price showed strong buying pressure, breaking through the 50% Fibonacci retracement level of the previous decline, which saw it fall from a high of $2,197 to a low of $2,075.

Currently, Ethereum is consolidating below the $2,140 mark and the 100-hour Simple Moving Average (SMA), accumulating strength. If buyers maintain the defense line above the $2,110 support level, there is a dominant probability of further upward breakout attempts. The immediate short-term resistance is around $2,140, and the primary key watershed for an upside move is identified as the $2,150 level, coinciding with the 61.8% Fibonacci retracement of the decline. On Ethereum's 1-hour chart, a converging triangle pattern has become visible, forming a resistance zone at the $2,150 level, indicating strong resistance from sellers.

If Ethereum definitively breaks above the $2,150 resistance, it could accelerate its ascent to the next target of $2,176. Furthermore, if it firmly establishes itself above the $2,176 resistance, it could pave the way for a further rally over the next few days, potentially surging to the $2,220 resistance level. Should it successfully break through this area as well, an upward scenario opens up, expanding its territory short-term past the $2,265 resistance zone to a final target of $2,320.

Conversely, if Ethereum ultimately fails to break through the $2,150 barrier and is pushed back, downward pressure could intensify again, leading to a sudden selling spree. The initial support level that needs to hold on the downside is around $2,110.

If this line collapses, the first major support zone at $2,065 will come into play, and if even the $2,065 defense line breaks, the price could fall to the $2,020 support level, increasing the decline. The possibility of a retreat to the $2,000 round figure (a round number where the unit falls exactly) area was pointed out if further sell-offs continue. Market experts warned that if Ethereum gives up even the final last line of defense, the key support level of $1,940, it could lose its long-term recovery potential and face a deep recession.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*