Ethereum Drops 5% After Reaching $1,687 High

Ethereum's price has recently experienced a notable increase, surpassing the $1,550 mark and reaching a high of $1,687. However, the cryptocurrency has since begun a downward correction, dipping below the $1,600 support level. The price is currently trading below $1,580 and the 100-hourly Simple Moving Average, indicating a potential shift in momentum.

Technical analysis suggests that Ethereum is facing resistance at the $1,550 level, with a new connecting bearish trend line forming on the hourly chart of ETH/USD. If the price can clear the $1,580 resistance zone, it may initiate a fresh increase. Conversely, if it fails to do so, a downside correction could ensue, with initial support at the $1,520 level and major support near the $1,500 zone.

Analysts have noted that the hourly MACD for ETH/USD is losing momentum in the bullish zone, while the RSI is now below the 50 zone. This technical data suggests that the bullish momentum may be waning, and a more cautious approach may be warranted for investors.

If Ethereum fails to clear the $1,580 resistance, it could start a downside correction. Initial support on the downside is near the $1,520 level. The first major support sits near the $1,500 zone and the 61.8% Fib retracement level of the upward move from the $1,385 swing low to the $1,687 high. A clear move below the $1,500 support might push the price toward the $1,455 support. Any more losses might send the price toward the $1,420 support level in the near term. The next key support sits at $1,380.

In summary, while Ethereum has shown signs of bullish momentum in recent weeks, the current price action suggests that the market may be cooling off. Investors should closely monitor key resistance and support levels, as well as technical indicators, to gauge the direction of the market in the coming days and weeks.