Bull trap as Ethereum engages reverse gear from record highs of $4,216.
Ether’s retreat seems unstoppable based on short-term technical indicators such as the RSI.Ethereum surprised many in the cryptocurrency market when it rallied above $4,000. It was song and dance for investors who have been patient with the pioneer smart contract token. An all-time high was formed at $4,216, allowing bulls to shift the focus to $5,000. However, the bullish momentum began fizzling out, leaving ETH with few options.
A correction ensued, forcing Ethereum to slide beneath $4,000. At the time of writing, the flagship cryptocurrency teeters at $3,790 amid an ongoing retreat. The reversal may continue in the near term based on the short-term technical levels.Ethereum begins the hunt for higher supportThe Moving Average Convergence Divergence (MACD) shines a light on the worsening technical picture. After rallying to 186, the indicator is dropping toward the mean line. Moreover, the MACD line (blue) has crossed under the signal line, insinuating that bears are in control and it was a possible time to sell the top.
ETH/USD four-hour chart
The Relative Strength Index (RSI) in the same four-hour chart also shows that Ethereum’s gravitational pull is more robust than the bullish advances at the time of writing. A continuous movement toward the oversold region would call more sellers into the market as investors rush to take profits.The hunt for higher support is in full force, especially with the zone at $3,800 broken. The following tentative anchor area is highlighted at $3,500 by the 50 Simple Moving Average (SMA).Ethereum intraday levelsSpot rate: $3,790Trend: BearishVolatility: HighSupport: $3,500 and $3,100Resistance: $3,800 and $4,000