Major cryptocurrencies began the week lower as investors continued to be concerned about the Bitcoin price drop, thus seemingly reducing their exposure to the broader market in expectation of lower pricing.
Ethereum, the second-largest cryptocurrency by market value, fell 2.66% in the last 24 hours to $2,408, mirroring the overall market trend.
Since reaching a high of $2717 on Jan. 12, Ethereum has steadily declined, bringing it to a crucial demand zone that remains decisive for its short-term price action.
According to Ali, a crypto analyst, ETH is currently in a key demand zone, ranging between $2,388 and $2,460. If this support holds strong, there seems to be a clear path ahead with minimal resistance, offering the potential for upward movement.
#Ethereum Market Update: $ETH is currently in a key demand zone, ranging between $2,388 and $2,460. If this support holds strong, there’s a clear path ahead with minimal resistance, offering a potential for upward movement.
⚠️ However, if #ETH fails to maintain this level, we… pic.twitter.com/F0HfyrSdGF
— Ali (@ali_charts) January 21, 2024
However, a bearish scenario could unfold if ETH fails to hold above this crucial support level. Ali states that if ETH fails to maintain this level, a pullback to the next significant support area of around $2,000 might occur.
A trip to around $2,000 would mean a 17% drop from the current price of $2,408. The next major support below $2,000 is the daily Simple Moving Average (SMA) 200, which is currently at $1,923.
A breach of this level could open the doors for more losses, possibly toward the $1,800 and $1,700 levels. Meanwhile, the daily SMA 50 level at $2,338 might seek to curtail losses in the immediate term.
On the other hand, if ETH sees a reversal from its current declines and bounces off the $2,388 and $2,460 support zones, it could resume its uptrend and target the $2,614 level again.
A successful break above this level could pave the way for a rally toward the $2,717 and $2,900 levels, where the coin faces the next hurdles. The ultimate target for bulls is to reclaim the $3,000 psychological level last reached in April 2022.
