TA: Ethereum Down 40% In A Week, Here’s Why ETH Could Recover

Ethereum declined heavily and it even tested the $2,000 support zone against the US Dollar. ETH price is attempting a recovery and it must clear $2,800 for a steady rise.

Ethereum is down over 40% in a week and it even tested the $2,000 support zone.
The price is now well below the $3,000 level and the 100 hourly simple moving average.
There is a major contracting triangle forming with resistance near $2,650 on the hourly chart of ETH/USD (data feed via Kraken).
The pair must clear $2,650 and $2,800 to move back into a positive zone in the near term.

Ethereum Price Shows Recovery Signs
Ethereum remained in a major downtrend from well above the $3,000 pivot level. ETH declined over 40% in a few days and it even broke the $2,500 support zone, similar to bitcoin.
The bears were able to clear the $2,200 support zone. There was also a spike below $2,000 and the price formed a swing low near $1,850. Ether is now recovering and it is trading above the $2,200 level. However, it is well below the $3,000 level and the 100 hourly simple moving average.
The recent swing low was formed near $2,149. An immediate resistance is near the $2,500 level. It is near the 50% Fib retracement level of the recent drop from the $2,847 swing high to $2,149 low.

Source: ETHUSD on TradingView.com
There is also a major contracting triangle forming with resistance near $2,650 on the hourly chart of ETH/USD. The triangle resistance is close to the 61.8% Fib retracement level of the recent drop from the $2,847 swing high to $2,149 low. A successful break above the $2,650 and $2,800 levels could open the doors for a steady recovery in the coming sessions. The next major resistance is near the $3,125 level.
Fresh Decline in ETH?
If Ethereum fails to continue higher above the $2,650 and $2,800 resistance levels, it could start another decline. An initial support on the downside is near the $2,300 level and the triangle trend line.
The first key support is near the $2,200 level. The main support is now forming near the $2,000 level. If there is a downside break below the $2,000 zone, the price could decline towards the $1,600 support.
Technical Indicators
Hourly MACD – The MACD for ETH/USD is slowly moving into the bullish zone.
Hourly RSI – The RSI for ETH/USD is now close to the 40 level.
Major Support Level – $2,000
Major Resistance Level – $2,800