Ethereum price secures key support, but recovery to $4,400 will be a daunting task
Ethereum’s sharp drop from historical highs of $4,400 did not find support above $4,000. The high gravitational force saw Ether explore lower price levels before embracing an anchor at $3,500. This support became crucial to the smart contract token by preventing losses from extending to $3,000. Similarly, buyers shifted their attention from $3,500 to levels above $4,000.
Ethereum recovery gradually catches momentum
At the time of writing, Ether has already made it above $3,800 and is trading at $3,820. The immediate upside is limited by the 50 Simple Moving Average (MACD) on the four-hour chart. Trading above this crucial level is vital for proving that recovery beyond $4,000 is possible.
The uptrend seems to have been validated by the Relative Strength Index (RSI) on the four-hour chart. This technical indicator follows the trend of an asset and measures its strength. The RSI identifies overbought and oversold conditions. Despite the 20% decline, Ethereum was not oversold; however, the recovery from around 40 is a bullish signal.
ETH/USD four-hour chart
The In/Out of the Money Around Price (IOMAP) on-chain model shines a light on an immense seller congestion zone ahead of Ethereum. This region runs from $3,858 to $3,911. Here, nearly 21,800 addresses previously purchased approximately 6.6 million ETH. Slicing through this zone will not be a walk in the park; thus, the uptrend may be hampered.
Ethereum IOMAP model
The model shows ETH sitting on top of relatively weak anchor zones on the downside. The formidable support runs from $3,344 to $3,459. Here, around 301,000 addresses previously bought roughly 2.2 million ETH. If overhead pressure rises in the coming sessions, Ethereum will likely dive toward $3,200 and $3,000 to hunt for a robust anchor zone.