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08 October, 2024

Ethereum Price Correction: Is This a Dip to Buy?

08 October, 2024

Ethereum Price Takes a Dip: Is This a Buying Opportunity?

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Ethereum (ETH) recently experienced a surge above the $2,500 mark, breaking through key resistance levels. However, the bulls seem to be losing some steam as ETH is currently retracing its gains. While this dip may be concerning for some, it could also present a compelling buying opportunity for savvy investors.

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The price of ETH is currently trading below $2,450, below the 100-hour Simple Moving Average. A key bullish trend line with support at $2,450 on the hourly chart of ETH/USD (data feed via Kraken) was also breached. For ETH to resume its upward momentum in the short term, it’s crucial that it holds above the $2,400 support level.

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Ethereum Price Corrects Gains

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Ethereum’s upward trajectory, fueled by a breakout above $2,400, saw ETH clear the $2,450 resistance and surge toward the $2,500 level. However, resistance at this level proved formidable. The bulls, despite initial strength, were unable to sustain the momentum, and ETH formed a high at $2,519, signaling a potential shift in market sentiment.

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The subsequent downside correction led to a break below the $2,450 support level, with the price dipping below the 23.6% Fibonacci retracement level of the upward move from the $2,311 swing low to the $2,519 high. The break below the crucial bullish trend line on the hourly chart further reinforced the bearish momentum.

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While currently trading below $2,450 and the 100-hour Simple Moving Average, the bulls are attempting to defend the 50% Fibonacci retracement level of the recent upward move. On the upside, ETH faces resistance near the $2,450 level.

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Potential Upside for ETH

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If Ethereum manages to break through the $2,450 resistance level, it could pave the way for a move toward the $2,500 resistance. A sustained break above $2,500 could signal a renewed bullish trend, potentially driving ETH toward the $2,580 resistance zone in the short term. The next significant resistance level lies near the $2,650-$2,665 zone.

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Downside Risk for ETH

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However, if Ethereum fails to reclaim the $2,450 resistance, it could trigger another decline. Initial support on the downside is near the $2,420 level. The first major support level sits at the $2,400 zone.

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Breaking below the $2,400 support could push ETH towards the $2,320 level. Further losses could lead to a drop toward the $2,250 support level. The next significant support level lies at $2,120.

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Technical Indicators

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Hourly MACD: The MACD for ETH/USD is losing momentum in the bullish zone.

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Hourly RSI: The RSI for ETH/USD is currently below the 50 zone.

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Key Support and Resistance Levels

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Major Support Level: $2,400

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Major Resistance Level: $2,450