The slight recovery of the cryptocurrency market we saw yesterday urged Ethereum traders to push the coin up to the first resistance level of $1,900, but, unfortunately, the sell-off on Bitcoin caused the second biggest cryptocurrency to plunge back on the monumental support line we mentioned before.
The mentioned support line formed back in the May-July period 2021 after Ether bounced off the same price level four times, making the $1,750 price one of the strongest support points on the daily and weekly chart of ETH.
Ether successfully bounced off the support back in May when the price of the second biggest cryptocurrency reached $2,000 after bouncing from $1,704, making it one of the first positive moves since the massive sell-off in the beginning of May.
Can it bounce once again?
Unfortunately, Ethereum did not manage to gain a foothold above $2,000 and retraced once again. But some technical indicators may suggest that the downtrend is close to ending.
According to the volume profile, the current trend is slowly fading as Ethereum's volatility is slowing down and traders are no longer actively betting on the plunge below $1,700, which can obviously happen because of the cryptocurrency market's volatile and unpredictable nature.
In addition to volume profiles, the Relative Strength Index is showing a considerably strong divergence with the price chart of ETH, which indicates an incoming price reversal since May 15.
The main cause that kept Ethereum from rallying above $2,000 is the lack of buying power following the massive fear of traders and investors to invest in the cryptocurrency market and risky assets in general. Also, the market has not yet recovered from a Terra ecosystem catastrophe that caused billions of losses for retail investors.