Ethereum has become one of the most popular assets in the market's recent bull run. The cryptocurrency currently has more than $320,000,000,000,000 in market capitalization, the highest after Bitcoin.
Despite this good news, the asset has devalued more than 55% from its historical highs over the last few days, in the largest drop since the bull run began in March 2020.
However, if we look at the Ethereum chart on the daily timeframe, we can see how the overall trend is still bullish; moreover, the price seems to be recovering after reaching $2,000.
But how important is this level around $2,000? Well, there we find a strong area where the price has acted as support throughout the month of April, thus preventing the price from falling below. Currently, we are finding a very similar scenario where we also have the 100- and 200-period moving averages above the price, which could act as a confluence at those levels.
Additionally, if Ethereum decides to break through the resistance around $3,000, the cryptocurrency can most likely go back to attack the historical highs, as long as it consolidates above those prices. Otherwise, we would see Ethereum in a range between $2,000 and $3,000.
But what can we expect in the short term? It is best to exercise caution and wait to see the price's reaction around $3,000 dollars on the four-hour chart, since in that area, we find the 100- and 200-period moving averages.
If the price does not manage to overcome this area, it would be best to wait for a lower configuration to try to enter long. A good area for this would be around $2,550, where we have a well-validated level with past data in confluence with the retest of the current downtrend line. If this scenario does not occur, it would be best to see the reaction at $2,000, or both scenarios with a target at $3,000.