Ethereum Faces Crucial Support at $3,006, Will It Hold or Dip to $2,850?

• Ethereum’s $3,006 support is crucial—losing it could lead to a dip toward $2,850 before any recovery.
• Short-term bearish pressure persists as the 50-day moving average declines, while long-term trends remain within an ascending channel.
• Strong resistance above $4,200 may limit more upward movement, although breaking above $3,250 would bolster positive momentum.

Ethereum (ETH) is experiencing volatility with prices circling $3,100. In light of a possible swing failure, analyst StefanB has cautioned traders who thought they had hit the bottom at $3,000 that they are not yet secure. In recent times, Ethereum has challenged the lower limit of an ascending parallel channel. However, a drop to $2,850 is probably in store if the price is unable to maintain support levels.

Technical Indicators Signal Possible Decline

Over the past few months, Ethereum’s price has shown a bullish trend moving within an ascending parallel channel. Despite this, the market has encountered short-term pressure. Currently, ETH faces a critical support level near $3,006, marked by the Fibonacci retracement level of 0.618. Failure to hold above this area could trigger further downside movement. A potential liquidity zone between $2,850 and $2,900 may be tested before a possible recovery.

Short-term gloomy sentiment is also indicated by moving averages. While the 100- and 200-day moving averages remain unchanged, the 50-day moving average drifts lower. The price recently tested the lower boundary of this trendline, acting as a dynamic support. If ETH manages to hold above $3,006, a reversal towards higher targets of $3,250 and $3,594 could be seen. However, if it breaks below this level, the next support could be found near $2,850.

Resistance and Key Levels to Watch

Ethereum’s resistance zone is still defined by the upper trendline of its ascending channel. This level remains a barrier, located around $4,200. A break above this level could shift the market sentiment to a bullish outlook. Furthermore, the price action suggests increased volatility, with ETH nearing the lower Bollinger Band. Consequently, traders should watch for key price levels and moving averages to determine the next market direction.