ETH/USD Daily Chart (Coinbase) – Source: TradingView

This would be at least the fourth time that ETH bounces off this support since October 10, underscoring the huge buying interest that still exists at this level.

Although this is an important shift in the narrative, the market may have overreacted, and strong hands seem to have dumped their tokens to sweep traders and enter long positions at a much lower price.

The Relative Strength Index (RSI) shows that ETH has entered a stage of consolidation. Hence, as long as the token stays above its 200-day exponential moving average (EMA), the worst may be over.

ETH could make it back to $4,000 if positive momentum gains traction after this latest bounce. The hourly chart shows the strength of the token’s recovery upon hitting $3,700, and positive momentum is already spiking in this lower time frame and could lead to some interesting gains as the American session begins.