Even $2,000 is risky... Ethereum needs to surpass '$2,500' to show hope

▲ Ethereum (ETH)

As Ethereum (ETH) tests the $2,000 support level, the recovery of $2,500 and $3,100 has emerged as a key condition that will determine the starting point of the next rally.

According to crypto media outlet NewsBTC on May 27 (local time), Ethereum is currently testing the key psychological support level of $2,000 amidst a recent bearish trend. Technical analyst Ali Martinez presented two conditions necessary for Ethereum to turn bullish again.

Martinez analyzed in a post on X (formerly Twitter) that Ethereum has been trapped within a wide multi-year trading range since 2021. He noted that recent price action reconfirmed this structure. Ethereum received a clear rejection at approximately $2,300, where the midpoint of the range and the 200-week Simple Moving Average (SMA) converged. Failing to reclaim this level has led to continued bearish signals rather than a recovery.

On the weekly chart, the immediate important price level is presented as $1,850. Martinez warned that if Ethereum closes below $1,850 on a weekly closing basis, downward momentum could rapidly increase. In this structure, the primary support area is approximately $1,560, with a subsequent downside target of around $1,070.

Martinez also mentioned the Market Value to Realized Value (MVRV) 0.8 price band. This band is located around $1,850, approximately 10% lower than the area Ethereum is currently testing. He explained that there have not been many instances in the past where a downtrend persisted for a long period after Ethereum fell below this band. He also assessed that this price level has served as a macro accumulation zone that could form the foundation for the next bull market.

However, he believes two conditions are necessary to confirm a bullish reversal. The first condition is the recovery of the 200-week Simple Moving Average (SMA), currently around $2,500. The second condition is a clear breakout of the 50-week Simple Moving Average (SMA), which is subsequently located around $3,100. Ethereum is being tested for its defense between the $2,000 support level and the $1,850 risk zone, and signals for a bullish resumption are limited until $2,500 and $3,100 are recovered.

*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.*