ETH price tests bottom of channel: $1.6K possible if support gives way

The Ethereum price is currently at $1.700. a slight increase of 0.2% over the past 24 hours. Analyst @alicharts sees Ethereum returning to the bottom of a price channel and states that this moment is crucial for the further direction of the price. A successful retest could remove excessive leverage from the market and build a stable support level, but if the price drops too low, a significant decline threatens.

Ethereum is available at OKX and Bybit.

200-hour SMA as dividing line for bulls and bears

On the hourly chart of Ethereum, it is clearly visible that the price is moving within a descending channel. The current pullback brings ETH back to the lower line of that channel, a zone that has served as support multiple times in the recent period. According to @alicharts, such a retest can actually be healthy because it gives the market a chance to unwind overheated positions and build a more solid foundation.

The key role in this scenario is reserved for the 200-hour Simple Moving Average (SMA). That line now acts as the main defence line for buyers. As long as Ethereum stays above it, the short-term structure remains intact and the bulls are in control. The levels to watch are $1.680 as direct support and $1.770 as first resistance above.

Fall below the 200 SMA opens door to $1.580

If the Ethereum price fails to hold the 200-hour SMA, the picture changes significantly. @alicharts indicates that a break below that level reverses the short-term trend and paves the way for a deeper correction towards $1.580, That would represent a significant decline from the current price, and the level also aligns with the lower boundary of the channel in the longer term.

The Ethereum community is closely watching the price after an eventful week. Earlier, another analyst saw a once-in-a-lifetime opportunity around $1.720, while ETH previously fell below $1.700 after a failed breakout attempt. Whether the current retest of the channel bottom leads to a recovery or a further decline largely depends on how the price behaves around the 200-hour SMA in the coming hours.