Technical outlook:
Ethereum dropped through formidable support at around $1,700 on Thursday, extending its drop as projected earlier. The crypto has now tested one-year support ($1,700) and is now pulling back sharply. It has regained the $1,900 handle at this point in writing as bulls are determined to come back in control holding above $1,700 going forward.
Ethereum has now carved a meaningful larger degree downswing between $4,850 and $1,700, which should be ideally retraced up to the $3,900 levels going forward. Furthermore, major support has been tested at around $1,700 which calls for a pullback in the near term before the larger degree trend resumes lower.
Finally, the RSI on the daily chart has produced a bullish divergence, which could be seen as a potential turning point. Ethereum faces immediate resistance around the $3,555 mark and bulls might be targeting to take that out in the next few trading sessions. Also note that $3,900 is the Fibonacci 0.618 retracement of the entire drop between $4,850 and $1,700, which is a strong resistance zone.
Trading plan:
Potential rally through $3,500 and $3,900 against $1,700
Good luck!
