Ethereum testing major Fibonacci retracement resistance level.

Ethereum recently made a pull back towards $2,944 from $3,334. This pull back was expected and justified. We were expecting a deeper pull back towards $2,700, nevertheless price reversed to the upside at $2,900 and today made a new higher high at $3,380.

Red lines - bearish divergence

Blue lines - Fibonacci retracements

Ethereum price is at an important Fibonacci retracement level. The 61.8% Fibonacci level is the most probable level for trend reversals. Price is testing the 61.8% level once again. The area around $3,400 is important resistance. Despite the new higher high in price today, the RSI did not follow and provided us with a lower high and a bearish divergence. This is an important warning for traders to be cautious.

Since the $2,944 low, price is making higher highs and higher lows. Support is found at $3,119. If price breaks below this level, then most probably a top is in and price has started another pull back. Breaking below $3,119 will be a bearish sign. Such price action could lead to a move lower towards $2,700. If bulls manage to break above $3,400 resistance area, next upside target is at $3,800.The material has been provided by InstaForex Company - www.instaforex.com