The cryptocurrency market experienced a notable pullback last week, and although volatility has slightly eased this week, there are still no clear signs of a sustained recovery. After seven consecutive months of growth peaking in April, the total crypto market cap has dropped over 15%, erasing all gains accumulated since March. It now hovers around a critical $2.23 trillion level.
This threshold is especially significant given the strong bullish momentum earlier in the year. A failure to regain upward traction by late April could trigger another wave of selling pressure. On the flip side, a move back toward $2.4 trillion—representing roughly a 7% increase from current levels—would signal a meaningful recovery and renewed investor confidence.
In today’s analysis, we’ll focus on identifying key support and resistance levels for three major cryptocurrencies—Ethereum (ETH), Dogecoin (DOGE), and Avalanche (AVAX)—to assess their potential for bottoming out and future upside.
Ethereum Breaks Below $3,500: Is $2,900 the Next Key Support?
Ethereum has struggled over the past month, primarily trading between $3,300 and $3,600. However, recent downward pressure led to a high-volume breakdown of the critical $3,360 support level, sending prices plunging toward $2,800.
This decline aligns closely with the 0.618 Fibonacci retracement level based on Ethereum’s 2023 bull run—an area often watched by technical traders as a potential reversal or continuation point. While initial selling pressure eased slightly at this level, the overall outlook remains bearish.
The rebound following the drop failed to clear the next resistance at $3,150, indicating weak buying interest. Technically, ETH continues to trade below its 3-month exponential moving average (EMA), with shorter EMAs also trending downward and crossing below longer-term averages—a classic sign of sustained bearish momentum.
For Ethereum to stabilize, holding above the $2,900 support zone will be crucial. A break below could open the door to further downside toward $2,600 or lower.
However, there are glimmers of hope. The daily and weekly Stochastic RSI show deeply oversold readings, suggesting that a corrective bounce may be brewing. A confirmed bullish signal would require the Stochastic RSI to rise above 20—likely triggered only by a daily close above $3,150.
Until that happens, Ethereum may remain vulnerable to continued selling pressure. Traders should monitor volume patterns and any signs of institutional accumulation near current levels.
Dogecoin Pulls Back After Early 2024 Rally: Can $0.144 Hold?
Dogecoin (DOGE) is undergoing its second correction phase of 2024, mirroring broader market weakness. After doubling in February and reaching a high of $0.18, DOGE fell to its current range around $0.12.
A second rally in March pushed prices up to $0.22—a new yearly high—but momentum stalled after failing to sustain breaks above previous resistance at $0.18. The price began losing steam near $0.15, marking the start of a fresh bearish phase.
Analyzing both rallies and corrections reveals a consistent pattern: during the first pullback, DOGE found ideal support at the 0.618 Fibonacci level. The current correction extends deeper, finding temporary footing near the 0.786 retracement zone—a historically strong area for reversals.
This region coincides with approximately $0.144 and is reinforced by the 3-month EMA, adding technical credibility to its importance. If buyers step in here and drive prices higher, it could spark a new upward move with an initial target at $0.16.
A sustained daily close above $0.16 could pave the way for a retest of $0.26—an aggressive but plausible target if market sentiment improves.
On the downside, key supports lie at $0.12 and then $0.096. A breakdown below these levels would suggest deeper weakness and potentially delay any meaningful recovery.
Avalanche Struggles to Find Support After Trend Line Break
Avalanche (AVAX) broke below the psychologically important $50 level in early April and simultaneously violated its 2024 ascending trend line. With no strong buying response in the following days, the downtrend accelerated.
Recent selling has placed AVAX in a precarious position. Attempts to recover have stalled repeatedly under $37—a level that now acts as immediate resistance.
Notably, $37 aligns with the 0.786 Fibonacci retracement level from AVAX’s prior upward move—a zone previously seen as strong support. Its failure to reclaim this area underscores continued dominance by sellers.
Technically, the short-term EMA has crossed below the 3-month EMA, reinforcing bearish momentum. However, a fragile support zone has emerged around $33, offering temporary relief and possibly setting up a bounce—if backed by volume.
👉 Learn how Fibonacci levels and moving averages help predict turning points in crypto markets.
This week is pivotal for Avalanche. A weekly close above $37 would be required to invalidate the current bearish structure and potentially initiate recovery. Failure to do so increases the risk of further declines toward $30 or even lower.
Given AVAX’s strong fundamentals and ecosystem development, any sustained rebound could attract significant interest from value-focused investors.
Frequently Asked Questions (FAQ)
Q: What causes cryptocurrency prices to drop after a long uptrend?
A: Extended rallies often lead to profit-taking, especially after events like Bitcoin halvings. Combined with macroeconomic factors and reduced trading volume, this can trigger corrections as markets rebalance.
Q: How do Fibonacci retracement levels help in trading?
A: These levels identify potential reversal zones based on historical price movements. Traders use them to spot support/resistance areas where price might bounce or break.
Q: Is now a good time to buy cryptocurrencies?
A: While current conditions suggest possible bottoming, timing the exact low is difficult. Dollar-cost averaging into fundamentally strong assets may reduce risk during uncertain phases.
Q: What indicators suggest a market bottom is forming?
A: Oversold Stochastic RSI, volume spikes on down days followed by consolidation, and stabilization near key Fibonacci levels can all hint at potential reversals.
Q: Should I only invest in large-cap cryptos during downturns?
A: Large caps like ETH tend to be more resilient, but mid-caps like DOGE and AVAX can offer higher growth potential post-correction—if they show signs of stabilizing.
Q: How important is market cap in evaluating crypto opportunities?
A: Market cap provides context on maturity and liquidity. Assets above $1 billion are generally less volatile than smaller projects, making them better suited for conservative strategies.
Final Thoughts: Navigating Volatility With Strategy
While Bitcoin’s post-halving cycle suggests the early stages of a new bull market may already be underway, short-term price action remains choppy. Ethereum, Dogecoin, and Avalanche—all showing signs of testing major support levels—could present compelling opportunities for patient investors.
Key factors such as technical structure, Fibonacci alignments, moving averages, and momentum indicators point to possible turning points ahead. However, confirmation through price action—particularly weekly closes above resistance—is essential before considering any aggressive positioning.
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As always, maintaining discipline through diversification, risk management, and thorough research into project fundamentals is vital. Avoid emotional decisions during drawdowns; instead, use pullbacks as chances to evaluate high-potential assets at more favorable valuations.
By combining technical analysis with a long-term perspective, investors can navigate uncertainty and position themselves for growth when momentum returns.
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