Ethereum's short-lived recovery fizzled out this week as the second-largest cryptocurrency failed to hold gains above $2,420. After a fresh increase that lifted prices from the $2,220 zone, ETH reversed sharply and broke below a bullish trend line on the hourly chart, slipping under $2,350 and the 100-hourly simple moving average. The move puts a near-term floor at $2,300 under serious pressure.
Trend line snaps near $2,365
The hourly chart had shown a clear upward channel since the $2,220 low, with a support line running near $2,365. That line broke during Wednesday's session, and ETH quickly dropped to test the $2,320 area. The break was accompanied by a loss of momentum in the hourly MACD, which is still in bullish territory but flattening. The relative strength index slid below 50, signaling that sellers are taking over the short-term picture.
The 50% Fibonacci retracement of the $2,220-to-$2,423 move was retested during the pullback, but it didn't hold as support. That's a sign the correction could extend.
Resistance stiffens at $2,420
Ethereum had tried several times to clear the $2,420 hurdle this week. Each attempt got a little higher, but none managed to close above it. The $2,420 level now acts as a local ceiling, with the next major resistance cluster at $2,450. A sustained break above $2,420 would open the path toward $2,500 and even $2,550, but the current price action suggests that won't happen soon.
On the downside, support at $2,320 is the first line of defense. If that fails, $2,300 becomes the next big test. A close below $2,300 would likely drive ETH toward $2,265 and possibly $2,200.
What needs to happen for a recovery
For Ethereum to regain the upper hand, it needs to climb back above $2,360 and reclaim the broken trend line. That's a tall order with the hourly MACD losing bullish steam and RSI stuck below 50. If buyers can't mount a push past $2,360 in the next few sessions, the downside correction could accelerate rapidly.
It's a waiting game now. The next few candles on the hourly chart will tell whether $2,300 holds or gives way.
