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Ethereum Dives Amid Profit Taking After The Recent Rally

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Ethereum Video 17.05.21.

Traders Stay Focused On Musk’s Tweets

Ethereum found itself under strong pressure at the beginning of this week. Cryptocurrencies moved lower after Elon Musk did not clearly state whether Tesla sold Bitcoin in a twitter discussion over the weekend. Musk has recently clarified his position and tweeted: “To clarify speculation, Tesla has not sold any Bitcoin”.

The tweet helped Ethereum and Bitcoin recoup some losses, but both leading cryptocurrencies remain under pressure. The sell-off in Ethereum is especially strong since the latest upside move was very fast, and traders rushed to get out of their positions in order to take some profits off the table.

Bitcoin is moving lower in an orderly fashion, and this move is worrisome for the whole crypto market as Bitcoin has recently made an attempt to settle below February lows near the $43,000 level. If Bitcoin settles below this level, it will gain additional downside momentum which will be bearish for other cryptocurrencies, including Ethereum.

Technical Analysis

Ethereum has recently managed to get out of the previous upside channel and gained downside momentum. However, the cryptocurrency received support at $3125 and got back above the resistance at the 20 EMA at $3290.

The next resistance level for Ethereum is located at $3600. If Ethereum gets above this level, it will head towards the resistance at $3775. RSI declined into the moderate territory, and there is plenty of room to gain additional upside momentum. If Ethereum settles above $3775, it will head towards the resistance at $4150.

On the support side, the nearest support level for Ethereum is located at the 20 EMA at $3290. If Ethereum declines below this level, it will head towards the recent lows at $3125. A move below the support at $3125 will open the way to the test of the support at $2800.

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This article was originally posted on FX Empire

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