Analysis: Ethereum Dives Deep Below $3,000, Is There a Chance of Recovery?

The crypto market has taken quite a beating and Ethereum is no exception. Despite the fact that the coin fell less hard than many other altcoins, it still lost a lot of percentages. Is there a chance of recovery from here? Let’s take a look at the charts.

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Significant drop to blue zone

We start this analysis with a look at the daily chart. Here each candle represents 24 hours, which gives us a good picture of the recent price changes. In this way, three price levels that influence the price become clear. These are indicated in the image below as gray, blue and red zone.

These price levels usually cause a change in price when the coin comes back here. Ethereum is currently in the middle blue zone, after it made a big drop. The price even dropped to 2,800 dollars, but quickly shot back into the blue zone. So the coin was bought up nicely.

This makes it seem plausible that the coin can recover again. As you can see from the other times the coin arrived here, the price then shot up by several percent, but of course it is no guarantee that this would happen again. It is therefore good to also look at other graphs and factors.

Another negative test?

That’s why we’ll also take a look at the 4-hour chart. Here, each candle represents 4 hours, giving us a more detailed picture of Ethereum. The coin has been very active in recent days, so there’s plenty to analyze.

For example, the coin initially dropped very quietly below the red zone, after which it made two negative tests (top orange circles). This means that there are now too many sellers at a price level that previously provided support. This usually causes a further drop, until the coin starts making higher highs and higher lows again.

Unfortunately, the latter has not happened yet. Ethereum is currently in a downtrend (of lower lows and lower highs) after making those negative tests. And such a situation may occur again now, as the coin has broken through the blue zone. This can be seen in the lower orange circle.

If the coin breaks above this level again, it will be positive for the rest of the price trend, but the opposite is true if this turns out to be a negative test. This can cause a further decline to the gray zone. Therefore, keep a close eye on these charts.

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