- Cryptocurrencies are shedding gains made earlier this year.
Ethereum faces hurdles below $3,500, eyeing support at $2,900 amid bearish indicators.
Dogecoin's correction echoes the market trend, eyeing $0.144 support, while Avalanche struggles under $37.
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Cryptocurrency markets took a tumble last week, and while things have calmed down this week, there's no clear sign of recovery yet.
After a stellar 7 months of growth culminating in April, the total cryptocurrency market cap has fallen by over 15%. This wipes out all the gains made in March, with the current value sitting at a critical $2.23 trillion.
Given the recent bullish momentum, this level is crucial. Stagnation here could trigger a second wave of selling if buying activity doesn't pick up in the latter half of April.
On the bright side, a surge in investments pushing the market cap back towards $2.4 trillion would be a significant signal of recovery – that's roughly a 7% increase from current levels.
Our analysis today focuses on identifying critical support and resistance levels for Ethereum, Dogecoin, and Avalanche after this recent decline.
1. Ethereum Struggles Below $3,500, Eyes $2,900 Support
Ethereum has been stuck in a rut for the past month, trading primarily between $3,300 and $3,600. However, a recent decline saw a critical support level at $3,360 crumble on high trading volume, sending the price tumbling down to $2,800.
This drop coincided with the 0.618 Fibonacci retracement level based on the 2023 uptrend. While initial selling pressure eased slightly around this point, the outlook remains bearish. The bounce back after the decline wasn't strong enough to overcome the next hurdle at $3,150.
Adding to the technical negativity, Ethereum continues to trade below its 3-month exponential moving average (EMA). Additionally, shorter EMAs are trending downwards, breaking below the 3-month EMA.
This confluence of technical indicators suggests the importance of holding the $2,900 support level to prevent further declines.
However, a glimmer of hope emerges from the oversold readings on the Stochastic RSI on both daily and weekly charts. This suggests a potential area for a rebound.
But for a confirmed buy signal, the Stochastic RSI needs to climb above 20. Based on the current situation, this could occur with daily closes exceeding $3,150. Until then, ETH is likely to remain under selling pressure.
2. Dogecoin Faces Correction After Early 2024 Surge
Dogecoin (DOGE) is experiencing its second correction phase of 2024, mirroring the broader market downtrend. After doubling in value in February, DOGE has fallen from its peak of $0.18 to its current price of $0.12.
March saw a second bullish swing, with DOGE reaching a high of $0.22. However, the cryptocurrency started to lose momentum around $0.15 after breaking through prior resistance at $0.18, marking the start of a new bearish phase.
Analyzing both bullish and corrective phases, we observe an ideal correction at the 0.618 Fibonacci level during the first decline. The current correction has been more extended, finding support at the 0.786 Fibonacci level.
Similar to the previous phase, if buyers step in around the current support zone of $0.144, this could trigger a new rebound. This level is further bolstered by the 3-month EMA (Exponential Moving Average).
In a potential uptrend, the first price target to watch is $0.16. If daily closes consistently surpass this level, a new peak of $0.26 could be established.
Should a new wave of selling occur, critical support levels for DOGE lie at $0.12 and then $0.096. These levels will be closely monitored for potential price breaks.
3. Avalanche Struggles to Find Support After Sell-Off
Avalanche (AVAX) tumbled below the key psychological level of $50 at the beginning of April, also breaching its 2024 uptrend line. The decline continued through the first week, as buyers failed to mount a significant defense.
The recent sell-off has left AVAX in a precarious position. Recovery attempts haven't surpassed $37, further amplifying the negative outlook.
This level coincides with the 0.786 Fibonacci retracement, which was previously considered critical support during the correction phase. The inability to reclaim this area suggests sellers might remain in control.
Technically, the short-term EMAs crossing below the 3-month EMA signal a potential continuation of the downtrend. However, a weak support zone emerged around $33 this week, offering a temporary reprieve.
This week is crucial for AVAX. Closing above $37 is essential to prevent further losses and initiate a recovery. If this level breaks, the downtrend could intensify, pushing the price below $30.
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Disclaimer: This content, which is prepared purely for educational purposes, cannot be considered as investment advice. We also do not provide investment advisory services.