The unsuccessful attempt on $253 in March resulted in a painful selloff for Ethereum. It took the cryptocurrency less than a week to slide all the way down to $90. The up move that followed afterwards, which could be spotted on the chart, was clearly corrective in nature. In our view, the recovery has already peaked out at $227. This can be easily confirmed by the breakout at the $195 support, which resulted in a series of lower highs and lower lows.
The outlook for Ethereum right now is rather negative below the $195 support turned into resistance. We expect the digital currency to continue its way south toward the $149 technical level. Its violation would result in a renewed rout, which would eventually send Ethereum to the $90 major support for an initial test. The latter would probably offer a reliable floor and reverse the downtrend. If that’s the case, the moment would be ripe for opening long positions on the asset.
Bear in mind that the bearish scenario depicted above would remain valid as long as the major $253 resistance holds. A potential violation of the latter, which at this moment is not our preferred scenario, would shift the market sentiment back to positive.