ETHUSD (Ethereum) had been trending higher since the beginning of the year, peaking at a fresh 11-month high of 2,142 after the successful completion of the Shanghai update. However, the digital coin experienced a significant downside correction in the past couple of sessions after reaching extremely overbought conditions.
The momentum indicators currently suggest that the recent advance was indeed overstretched as both the RSI and the stochastic oscillator are coming down from their overbought territories. However, they remain above their 50-neutral marks, hinting that bulls have not totally surrendered yet.
Should Ethereum extend its retreat, the bears could aim for 1,911, which is the 38.2% Fibonacci retracement of the 3,581-879.40 downleg. If that barricade fails, the spotlight may turn to the 23.6% Fibo of 1,517, which lies very close to the 200-day simple moving average (SMA). Even lower, the March bottom of 1,370 may provide downside protection.
On the flipside, if buyers re-emerge and push the price above the 2,000 psychological mark, the recent 11-month high of 2,142 might act as initial resistance. Surpassing that zone, the price could challenge the 50.0% Fibo of 2,230. Further advances could then cease at the 61.8% Fibo of 2,549.
Overall, ETHUSD experienced a pullback after its remarkable surge came to a halt at an 11-month high, but its bullish technical structure remains intact. For the sentiment to turn bearish, the price needs to drop beneath its 200-day SMA, currently at 1,492.
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