Altcoin leader Ethereum looked to keep its head above water on Sunday after showing early signs of recovery around $2,300. While the move would comfort short-term investors, ETH traded below major pockets of demand and any kind of recovery would most likely be short-lived until more solid support is found. At the time of writing, ETH traded at $2,500, up by 3% over the last 24 hours.
Ethereum Hourly Time Frame
Ethereum attempted to make headway above $2,500 as buyers laid the building blocks for recovery at the 23.6% Fibonacci level ($2,300). The move allowed bulls some momentary respite after ETH registered a 30% decline from $3,275 to $2,300. However, ETH was far away from any bullish assurances. The hourly 50-SMA (yellow) and $2,600 still posed as resistance and the same would be tricky to overcome.
In fact, according to the hourly Bollinger Bands, ETH had already reached its maximum upside after trading at the upper end of the bands. Since the bands were contracting, low market volatility could lead to a buildup phase between $2,500-$2,300, after which sellers would most likely win the battle. In case of another drawdown, near-term support levels reside at $2,300 and $2,180 whereas $1,730 would be active in case of a deeper sell-off.
Indicators
Short-term gains could directly be attributed to the hourly RSI, which traded below 30. Historically, ETH observes a rebound after trading on the extreme ends on RSI as investors hunt for buy/sell opportunities. Once the RSI moves above 55, there is a good chance that the index stretches all the way to the overbought territory before reversing.
The Awesome Oscillator, which measures market momentum, favored buyers after flashing three higher lows followed by a stash of green bars. A move above the half-line could even invite more short-term gains through new buy orders.
Conclusion
While ETH’s near-term was improving, the hourly 50-SMA (yellow) and $2,600-resistance were expected to halt an extended recovery attempt. Once a slight buildup phase between $2,500-$2,300 concludes, ETH could make its way south until more reliable support is discovered.