Technical Analysis Shows Possible Extended Decline Below $1,785

TLDR

Ethereum is trading below $1,800 and the 100-hourly Simple Moving Average with a bearish trend line at $1,830
ETH found support near $1,785 after failing to clear the $1,880 resistance level
The upcoming Pectra upgrade on May 7 brings validator scaling, cheaper L2 fees, and smart contract wallets
Coinbase will pause ETH deposits/withdrawals during the upgrade window
Technical indicators show MACD gaining momentum in the bearish zone with RSI below 50

Ethereum price has started a downside correction below the $1,850 zone. The second-largest cryptocurrency by market cap is now trading below $1,800 and the 100-hourly Simple Moving Average as bears regain control of the market.

ETH failed to clear the $1,880 resistance level and began declining below several key support levels. The price moved below the 50% Fibonacci retracement level of the upward movement from the $1,734 swing low to the $1,872 high.

The bears pushed the price below the important $1,800 psychological level, but ETH found support near $1,785. This level marks a critical zone for the cryptocurrency in the short term.

Technical analysis shows a bearish trend line forming with resistance at $1,830 on the hourly chart of ETH/USD. The price is facing hurdles near the $1,820 level with the next key resistance positioned at $1,830.

Potential Support and Resistance Levels

On the upside, a clear move above the $1,880 resistance could send the price toward the $1,920 level. Breaking this resistance might trigger more gains, potentially pushing ETH toward the $2,000 mark.

However, if Ethereum fails to overcome the $1,830 resistance, it could start a fresh decline. Initial support sits near the $1,785 level and the 61.8% Fibonacci retracement level of the recent upward move.

The first major support is established at $1,750. A drop below this level might push ETH toward $1,720, with the next key support at $1,685. Further losses could send the price to the $1,640 support level.

The Pectra Upgrade: A Potential Game Changer

Despite the current bearish signals, the upcoming Pectra upgrade scheduled for May 7 at 3:05 am PT brings hope for ETH holders. This upgrade introduces several key refinements to the Ethereum mainnet.

One major change is validator consolidation, increasing the cap from 32 ETH to 2,048 ETH. This modification aims to make staking more efficient and potentially higher yielding for participants.

Layer 2 solutions could become cheaper as the upgrade doubles blobs per block from 3 to 6. This enhancement directly benefits roll-ups like Optimism and ZK-Sync through lower data posting costs.

Additionally, EIP-7702 will bring temporary smart contract functionality to Ethereum wallets, making them more versatile for users and developers alike.

Market Response and Exchange Preparations

As the upgrade approaches, major cryptocurrency exchange Coinbase has announced a temporary pause in Ethereum deposits and withdrawals. This precautionary measure will last from 2:50 am to 3:45 am PT on May 7.

The initiation of new staking requests during this period will also be delayed until 3:45 am PT, though existing stake positions will remain unaffected.

In the 4-hour price chart, Ethereum shows sideways movement above the $1,755 mark, which represents a high-demand area extending between $1,754 and $1,765. This zone has provided multiple bouncebacks, helping to maintain the uptrend along with the 200 EMA line.

Currently, ETH price is holding above $1,800 after a prevailing recovery, with the 100 and 200 EMA lines approaching a positive crossover. However, the RSI indicator reflects diminishing momentum as the consolidation range expands.

Technical data from IntoTheBlock shows a strong resistance zone between $1,805 and $1,857, containing 5.85 million ETH across 4.48 million addresses. This compares to the nearest demand zone from $1,748 to $1,800, which holds 2.29 million ETH within 3.46 million addresses.

On-chain analyst DarkFost notes a sudden slowdown in Ethereum spot volume, which could signal reduced selling pressure. While this doesn’t necessarily indicate a market bottom, it might help reduce volatility under current conditions.

With the Pectra upgrade around the corner and key technical levels clearly defined, Ethereum traders and investors are closely watching for price movements in the coming days. The upgrade’s success could potentially trigger a bullish phase for ETH, possibly pushing it toward the $2,000 level despite current bearish indicators.