Ethereum Drops 13% in March, Eyes 40% Rally on Bullish Reversal

Ethereum has experienced significant selling pressure over the past few weeks, with its price dropping below the $2,000 mark. This downward trend culminated in a low of $1,750 on March 11, the lowest point since November 2023. Despite this decline, a new technical setup on the 4-hour chart suggests that Ethereum may be poised for a bullish reversal. The cryptocurrency is currently retesting a key resistance level, which could signal a potential breakout and a significant rally above $2,000.

Ethereum's price action has been characterized by downtrends and investor exits since early March. The cryptocurrency broke below $2,000 on March 10 after support levels failed to hold, and has since traded below this level for the past week. However, after reaching $1,750, Ethereum has shown signs of recovery, rebounding to around $1,900. This recovery has brought the cryptocurrency back to a downward-sloping resistance trendline, which has acted as a barrier to brief upward movements during the recent downtrend.

The test of this resistance level presents a potential breakout scenario where bullish momentum could flow into Ethereum. An analyst on TradingView highlighted this setup, noting that a breakout above the resistance trendline could open the doors for a significant rally above $2,000. Despite the prevailing bearish sentiment in the broader crypto market, some analysts and investors remain optimistic about Ethereum's potential to regain its bullish footing.

According to the analysis, a confirmed breakout above $1,885 could serve as an ideal entry point. At the time of writing, Ethereum is yet to break above the downward sloping resistance trendline, with the breakout point set just below $2,000. If Ethereum were to eventually break above the resistance, the analyst noted a probable price target of $2,596. The analysis also advises placing a stop loss at $1,700, managing risk while aiming for substantial gains. This setup is structured to manage risk while aiming for substantial gains, in case the bearish momentum is too great to be overcome, and the Ethereum price gets rejected again at the resistance trendline. Given the high-risk reward ratio, the analyst advised watching for a surge in volume, which would provide confirmation that Ethereum is breaking out with momentum.

At the time of writing, Ethereum is trading at $1,895. Price action in the past 24 hours saw Ethereum reach an intra-day high of $1,950 before rejecting. However, the leading altcoin is still rolling around this resistance trendline, and there is a chance of a push upward again in the next 48 hours. The analysis suggests that a confirmed breakout above $1,885 could serve as an ideal entry point for investors looking to capitalize on Ethereum's potential bullish reversal. The probable price target of $2,596, along with the stop loss at $1,700, provides a clear risk-reward ratio for investors to consider. As Ethereum continues to test the resistance trendline, investors will be watching closely for any signs of a breakout and the potential for a significant rally above $2,000.