Ethereum has once again come under selling pressure after slipping below its monthly support level. As it trades near $1,587, analysts predict further short-term downside for the cryptocurrency, though they are also watching closely for potential signs of a longer-term bottom forming in the broader timeframe.
Weakening structure in the monthly chart
A monthly chart shared by Jesse Olson highlights that Ethereum has closed below the $1,790 region, which was previously a significant support area. This level continues to carry weight from a technical analysis perspective. Failure to reclaim $1,790 could, on higher timeframes, confirm that Ethereum’s structure is deteriorating.
Olson notes that Ethereum is approaching the formation of a new lower low on the monthly chart, underscoring persistent selling pressure, with eight of the last ten monthly candles closing in the red.
Jesse Olson evaluates that Ethereum is in the process of forming a lower low on the monthly timeframe, and if $1,790 is not recovered, the weakening structure could become even more apparent in the broader outlook.
The chart points to the next major support near $1,066. Below this, longer-term support levels appear at around $600 and $114; however, these are well beneath current prices and are relevant only in broader, more bearish scenarios.
The $1,400 area emerges as short-term focus
In his weekly analysis, Hov suggests that Ethereum could experience another pullback toward $1,400 before this correction phase is over. According to Hov, the area between $1,200 and $1,400 stands out as a key zone of support and technical convergence.
Within this scenario, the $1,400 mark is considered critical. As the price approaches this level, attention will focus on whether positive divergence observed in the chart is maintained. Positive divergence occurs when the price dips to new lows, but momentum indicators do not weaken to the same degree—potentially signaling that selling pressure is losing steam.
Mini glossary: Positive divergence happens when price makes a new low but momentum indicators such as RSI do not decline equally. In technical analysis, this can indicate waning downward momentum and possible buying interest.
Hov states that Ethereum may require another retreat toward the $1,400 zone to complete its broader correction, and maintaining positive divergence during this move could support the scenario of a potential bottom formation.
Should Ethereum fall into this zone and manage a robust rebound from support, a larger-scale recovery might unfold. Conversely, a weak reaction at support would likely delay any expectations of trend reversal or bottom formation.
Monthly close to provide critical direction
In the short term, markets are focused on Ethereum’s monthly close as the main indicator for near-term direction. If Ethereum ends the month below the lost support area, downward momentum could persist. Conversely, a return above $1,790 would be interpreted as the first sign of technical recovery.
