Main Takeaways
- Ethereum dipped below $3,400 over the weekend as the broader market underperformed.
- The cryptocurrency is now trading above $3,500 and could soon approach the $3,700 level.
Ethereum Rebounds After Weekend Sell-Off
Like the wider cryptocurrency market, Ethereum has shown weak performance this past week. The second-largest cryptocurrency by market capitalization lost 8% of its value in the last seven days, hitting a low of $3,359 on Saturday.
This decline was influenced by several macroeconomic factors. The Federal Reserve maintained interest rates, while the Fed Chair indicated uncertainty regarding potential rate cuts planned for September.
Additionally, disappointing results from the non-farm payroll index suggested that the U.S. economy is growing at a much slower pace than anticipated. The market also reacted negatively to new discussions surrounding tariffs.
These macroeconomic factors led to over $200 million in outflows from Ethereum ETFs, driving Ethereum below the $3,400 mark.
However, the market is currently in recovery mode, and there may be potential for an upward movement if conditions remain favorable.
ETH Targets Resistance Level at $3,700
The 4-hour chart for the ETH/USD pair appears bearish after Ethereum’s price closed below its daily support level of $3,730 over the weekend. The recent climb above $3,500 indicates that Ethereum found support around its 78.6% Fibonacci retracement level at $3,392. As of this writing, it continues to rise, trading above $3,500.
Currently, technical indicators are rebounding from the weekend’s lows. The RSI on the 4-hour chart is at 49 after bouncing off the neutral level of 50 on Saturday, indicating bullish momentum is gaining strength. The MACD lines are also poised to soon enter bullish territory.
If ETH continues its rebound, it could extend the rally and recover the resistance point at $3,730. A sustained upward movement would bring Ethereum closer to the monthly high of $3,931.
Conversely, should ETH face a correction, it may descend further and retest the key support level of $3,170. The support around $3,300 is currently being defended by bullish traders.
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