Despite questionable performance last week, we could see the conclusion of a massive bearish rally as Ether hits massive support
Ethereum’s last two weeks of market performance are the worst period the asset has had since the beginning of the year as ETH has lost over 40% of its value in such a short time. But after dropping to $1,770, the plunge slowed down. Here are a couple of reasons.
Fundamental support line
Although not so evident on the daily and intraday charts, Ethereum has reached the massive support line that had been the foundation of the rally that began in the summer of 2021. The line is moving into the $1,700 area. at $1,800, suggesting that we could see a bounce or reversal around the price we are seeing now.
The aforementioned line has also been tested recently during Ethereum’s flash-crash on May 12, when the second biggest cryptocurrency on the market lost 10% of its value in a matter of hours but then quickly recovered back.
200 week moving average
In addition to the support line passing through $1,700, Ethereum bears are preparing to face another strong support line, which often acts as a barrier between bull and bear markets.
The 200-week moving average has not been touched once by Ethereum in the last 100 weeks. In case of a breakout, we will see the first test around the end of May.
Oversold
Last but not least is the massive oversold, which we are seeing, according to the RSI indicator. The selloff was most likely caused by long-term Ethereum holders after issues with the Beacon Chain which runs on the PoS consensus algorithm, which the mainnet is expected to inherit in the coming months.
