The 200-week SMA seems to be psychological support, partly because it has acted as the bottoms of BTC’s previous bear markets.
Independent market analyst “Bluntz” also argues that this SMA will serve as a strong price floor for Ether where it is likely to accumulate.
“BTC has bottomed 4x at the 200wma dating back to 2014. [Probably] safe to assume it’s a pretty strong level. Sure we can wick below it, but there [are] also six days left in the week.” He noted.
Currently, ETH/USD is down nearly 75% from its record high at $4,950, established in November 2021.
This major correction has made ETH an “oversold” asset as its RSI dipped below 30, another technical indicator showing that ETH is a “buy.”
The last time Ether turned to the oversold zone was in November 2018, before the end of a 12-month bear cycle that saw ETH losing 94% of its value.
Unfortunately, the same downside cannot be promised in 2022 as Ether continues to face some serious macro headwinds.
ETH technical bullish signals
ETH is struggling to find a bottom after the backdrop of a selling frenzy in crypto and traditional financial markets.
The core of the 75% correction is that Federal Reserve likely to raise interest rates by 175 basis points by the end of September, according to interest rate swaps linked to the FOMC policy outcome date.
In other words, risky assets will suffer as the cost of lending increases. This could break Ether’s recovery prospects even though it is holding above “strong” support level.
Targets of Ether price
ETH price has proved the 0.786 Fib level (near $1.057) as its interim support. This price level is also part of the FIb retracement graph from the $1,323 high to the $82 low, as shown in the chart below.
The 2018-like 94% decline risks pulling ETH price to the 0.236 Fib level near $375, drop 70% drop from the June 15 price.
In contrast, if Ether does bottom out near its 200-week SMA, its path of least resistance seems to be a $2,000 rally. Breaking above this level could help ETH reach its next target at $3,500.
Disclaimer: This article is for reference purposes only, not investment advice. Investors should have deep research before making a decision.
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