Ethereum Trims Gains, Why $2,500 Is The Key For Fresh Rally

Ethereum corrected gains from the $2,640 zone against the US Dollar. ETH price is now trading above a major support at $2,500 and the 100 hourly SMA.

Ethereum failed to clear $2,650 and started a downside correction.
The price is now trading above $2,500 and the 100 hourly simple moving average.
There is a key declining channel forming with resistance near $2,550 on the hourly chart of ETH/USD (data feed via Kraken).
The pair is likely to start a fresh increase as long as it is above the $2,500 level.

Ethereum Price Holding Key Support
Ethereum gained pace above the $2,600 resistance and extended its upward move. However, ETH failed to surpass the $2,650 resistance. A high was formed near $2,638 before it started a downside correction.
There was a break below the $2,600 and $2,550 support levels. Ether price declined below the 50% Fib retracement level of the of the recent increase from the $2,461 swing low to $2,638 high. The price even traded below the $2,520 support.
It is now trading above $2,500 and the 100 hourly simple moving average. It is holding the 76.4% Fib retracement level of the of the recent increase from the $2,461 swing low to $2,638 high.

Source: ETHUSD on TradingView.com
There is also a key declining channel forming with resistance near $2,550 on the hourly chart of ETH/USD. A clear upside break above the channel resistance and $2,550 might start a fresh rally. The next key resistance is near the $2,600 level. The main resistance is still near $2,640 and $2,650. Any more gains could open the doors for a larger increase towards $2,750.
Downside Break in ETH?
If Ethereum fails to clear the $2,550 and $2,600 resistance levels, it could continue to move down. An initial support on the downside is near the $2,510 level.
The first major support is near the $2,500 level and the 100 hourly SMA. A downside break below the 100 hourly SMA could push ether price towards the $2,450 support zone. Any more losses might clear the path for a drop towards the $2,400 level in the near term.
Technical Indicators
Hourly MACD – The MACD for ETH/USD is now losing pace in the bearish zone.
Hourly RSI – The RSI for ETH/USD is currently close to the 50 level.
Major Support Level – $2,500
Major Resistance Level – $2,550