Key takeaways
- Ether dropped below the $3,400 level over the weekend as the broader market underperformed.
- The coin is now trading above $3,500 and could rally towards the $3,700 level soon.
Ether rebounds from the weekend’s sell-off
Ether, similar to the broader cryptocurrency market, underperformed last week. The second-largest cryptocurrency by market cap lost 8% of its value over the last seven days and hit a low of $3,359 on Saturday.
The poor performance was caused by several macroeconomic factors. The Federal Reserve kept interest rates the same while the Fed Chair suggested that there is no certainty over a September rate cut.
The Nonfarm Payroll also came out poorly, indicating that the US economy was growing at a much slower rate than expected. Finally, the market reacted negatively amid new tariff discussions.
The macroeconomic factors saw over $200 million in outflow for Ethereum ETFs, resulting in Ether dropping below the $3,400 mark.
However, the market is currently in a correction and could surge higher if conditions remain positive.
ETH targets the $3,700 resistance level
The ETH/USD 4-hour chart is bearish and efficient after Ethereum price closed below its daily support level of $3,730 over the weekend. The recovery above $3,500 shows that Ether found support around its 78.6% Fibonacci retracement level at $3,392. At the time of writing, it continues its recovery, trading above $3,500.
The technical indicators are currently rebounding from the weekend’s low. The RSI on the 4-hour chart reads 49 after bouncing off the neutral level of 50 on Saturday and points upwards, indicating bullish momentum gaining traction. The MACD lines are also set to cross into bullish territory soon.
If ETH continues its recovery, it could extend the rally and reclaim the $3,730 resistance point. An extended bullish movement would allow Ether to surge towards the monthly high of $3,931.
On the other hand, if ETH faces a correction, it could dip further and retest the key support at $3,170. The support level around $3,300 is currently being protected by the bulls.
