Ethereum started a strong surge above the $500 resistance against the US Dollar. ETH price traded as high as $562 and it is currently correcting gains.

• ETH price traded to a new multi-month high near $562 against the US Dollar.
• The price is currently correcting lower below $550, but it is well above the 100 simple moving average (4-hours).
• There is a major bullish trend line forming with support near $495 on the 4-hours chart of ETH/USD (data feed via Kraken).
• The pair could correct lower, but dips are likely to remain attractive near $530 or $510.

Ethereum Price is Showing Positive Signs

This past week, bitcoin and ethereum gained bullish momentum above $18,000 and $500 respectively against the US Dollar. ETH price surged further above the $520 resistance and settled well above the 100 simple moving average (4-hours).

The upward move was such that there was a break above a key connecting resistance trend line at $508 on the 4-hours chart of ETH/USD. The pair gained pace and traded above the $540 and $550 levels.

Ether price traded to a new multi-month high near $562 and recently started a short-term correction. It traded below the $550 level, and broke the 23.6% Fib retracement level of the recent upward move from the $503 swing low to $562 high.

Source: ETHUSD on TradingView.com

The first key support on the downside is near the $532 and $530 levels. It is close to the 50% Fib retracement level of the recent upward move from the $503 swing low to $562 high.

On the upside, the $555-$560 zone is a key hurdle for the bulls. A successful break above the $560 resistance might start another rally. In the stated case, ether price is likely to rally towards the $580 and $585 levels.

Downside Correction in Ether (ETH)?

If Ethereum fails to extend its rise above $560, it could correct lower. The first major support zone sits near the $532 and $530 levels.

If there are more losses, ether price could move down towards the $510 support zone. There is also a major bullish trend line forming with support near $495 on the same chart, where the bulls are likely to take a strong stand.

Technical Indicators

4 hours MACD – The MACD for ETH/USD is slowly losing momentum in the bullish zone.

4 hours RSI – The RSI for ETH/USD is correcting lower from the 80 level.

Major Support Level – $530

Major Resistance Level – $560

Source