On Tuesday, ether (ETH) was on the defensive, approaching an uptrend line representing the recent recovery rally.
At press time, the second-largest cryptocurrency traded 3% lower on the day at $1,575. The decline follows late last week's buyer failure to establish a foothold above the 100-day simple moving average, then placed at around $1,750.
A breakdown of the rising trend-line support would imply an end of the corrective bounce from under $1,000 and shift focus to $1,356, the support of the higher low printed on June 26. Below that, $1,000 could be the level where buyers may step in, putting a floor under prices.
A drop to $1,000 could be seen if the daily-chart moving average convergence divergence (MACD) histogram drops below zero, indicating a bearish shift in momentum, according to Katie Stockton, a chartered market technician and founder and managing partner at Fairlead Strategies. Traders use the MACD histogram to identify trend changes and trend strength. Currently, the MACD is barely holding above zero.
A case for an extended relief rally will strengthen if prices retake recent highs above $1,700 and the weekly chart MACD histogram confirms a positive crossover. While the weekly MACD teased a so-called buy signal or crossover above zero as of this writing, the indicator needs to hold the same through Sunday's UTC close to confirm a trend reversal higher.
"If ether clears $1,733 decisively and confirms a weekly MACD 'buy' signal, that would support an extended relief rally, with secondary resistance near the 200-day MA," Stockton wrote in the weekly market note shared with CoinDesk on Monday.
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