Geopolitical shockwaves hit crypto markets as Ethereum nosedives 5% following Iran's military escalation. The second-largest cryptocurrency now teeters at make-or-break technical levels.
Traders scramble as ETH tests key support
The sudden sell-off caught leveraged positions off guard, liquidating over $50 million in ETH futures within hours. Market depth evaporated faster than a DeFi rug pull – proving once again that crypto volatility makes traditional finance look like a retirement fund.
Technical charts flash warning signs
Critical Fibonacci levels at $3,200 and $3,000 now serve as potential bounce zones. A breakdown below could trigger algorithmic selling cascades. Meanwhile, resistance clusters near $3,500 await any recovery attempt.
Institutional players watch from the sidelines, likely waiting to scoop up cheap ETH while retail panics. Because nothing warms a hedge fund manager's heart like profiting from others' misfortune.
Ethereum Breaks Below Key Support; More Downside Ahead?
From a technical perspective, the Ethereum price prediction appears weak. The price has been forming lower highs capped by a descending trendline from the $2,900 high. This trendline has been rejecting all the bullish attempts and shows bearish control.
The break below $2,378 horizontal support is significant. This level was a floor through most of May and early June and has now become resistance. The three black crows candlestick pattern is a bearish reversal pattern, indicating further selling.
ETH is also below the 50-period EMA at $2,493. This EMA is dynamic resistance in a downtrend, confirming the bearish setup.
Moreover, the MACD is showing a widening gap between the MACD and signal lines (-20.18 vs -41.31) and a declining histogram. A bearish MACD divergence was visible before the drop as momentum faded even as ETH tried to hold above $2,400.
Trade and Levels to Watch
With $2,378 now resistance, ETH traders should look for a bearish retest of that level. If price tries to reclaim this zone but fails, especially with bearish candlesticks like a spinning top or bearish engulfing pattern, it will be a low-risk short setup.
- Entry Range: $2,370–$2,378 on a confirmed rejection
- Stop-Loss: Above $2,400 to avoid false breakouts
- Target 1: $2,114 – A strong historical support zone
- Target 2: $2,036 – Deeper demand level last tested in April
Also, watch for RSI divergence or reversal candles at $2,114 to see if the downtrend is exhausted. In summary, the recent sell off is a mix of geopolitical and technical.
Until ETH reclaims the 50 EMA and breaks above the trendline, the path of least resistance is down. Be cautious and wait for confirmation at key levels before entering.
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