Ethereum recently experienced a rejection from a critical confluence zone, including the 0.618 Fibonacci retracement level. With the price now trading below the point of control (POC), traders are closely monitoring the market for signs of a deeper correction or a potential reversal.

Ethereum’s Price Stalls at a Key Technical Zone

Ethereum (ETH) has faced significant resistance at the 0.618 Fibonacci retracement level, a widely followed technical marker. This level, drawn from the most recent pivot high to low, is further reinforced by daily horizontal resistance and a descending VWAP (Volume-Weighted Average Price). This confluence of factors has created a strong technical ceiling, making it a critical decision zone for traders.

After multiple failed attempts to break higher, ETH has started to lose momentum, trading back below the local range’s POC. This shift indicates a potential shift in market sentiment, with sellers seemingly gaining the upper hand in the short term.

Key Technical Points to Watch

  • Major Resistance Cluster: The 0.618 Fibonacci retracement level, daily resistance, and descending VWAP form a significant technical barrier.
  • Loss of POC: ETH has fallen below the volume point of control, signaling a shift in the market’s short-term auction dynamics.
  • Bearish Structure Building: Lower highs and stalled breakouts point to a higher likelihood of a move toward the $1,540 support zone.

Detailed Analysis of Ethereum’s Price Action

Ethereum’s price recently made an impulsive move higher, only to stall below a heavy resistance zone. The 0.618 Fibonacci retracement level, combined with daily horizontal resistance and a declining VWAP, attracted significant selling pressure. Following several failed attempts to break through, ETH has started to roll over.

Adding to the bearish sentiment is the loss of the POC within this range. The POC, representing the price level with the highest trading volume, is a critical indicator of market acceptance. ETH’s drop below this level suggests that the market is no longer accepting value at these prices, increasing the probability of further downside movement.

“Price rejection from key technical zones often precedes range rotation or continuation in the direction of the rejection.”

The short-term technical structure also leans bearish. Ethereum has struggled to print higher highs or sustain higher lows, a common precursor to a broader correction. The next significant support level is near $1,540, a zone characterized by previous structural support and visible price inefficiencies, such as unfilled fair value gaps. These areas could act as magnets for price movement if selling pressure continues.

Potential Scenarios for Ethereum’s Price Movement

The current setup suggests that Ethereum could face a 10% downside move from current levels if the recent swing low fails to hold. A breakdown below this level would likely target the $1,540 region, a critical support area with historical significance.

However, traders should also consider the possibility of a fakeout. Ethereum has previously demonstrated the ability to rebound strongly from similar rejection zones. If buyers can defend the current levels and push the price back above the POC, it could signal a resumption of the bullish trend.

Tips for Traders

  • Monitor the $1,540 support level closely for potential buying opportunities.
  • Use stop-loss orders to manage risk in case of further downside movement.
  • Pay attention to volume and momentum indicators to confirm breakout or breakdown scenarios.
  • Stay updated with market sentiment and news affecting Ethereum and the broader cryptocurrency market.

For now, caution is warranted as Ethereum hovers near a pivotal level. Traders should keep an eye on both the $1,540 support zone and the possibility of reclaiming the POC for signs of the next major price direction.

Post Views: 0