Ethereum broke below the $1600 support and showed a bearish slope on the chart. The broader market weakness has also contributed to Ethereum’s current price action.
Bitcoin price dropped to the $20,000 level, altcoins also portrayed similar price action.
Ethereum over the past 24 hours has shown some slight upside on the chart. The technical outlook for cryptocurrencies remains bearish.
Buying power has subsided over the past couple of days, and at the time of writing, the currency is dominated by sellers.
Continued selling pressure could push ETH to the $1,100 price level before it starts to regain momentum again.
In the event the bulls find their way back into the market, ETH may continue to consolidate on its chart and then try to rally.
Buying power must also recover significantly for Ethereum to invalidate the bearish theory. Over the past week, Ethereum lost 4% of its market capitalization.
Ethereum Price Analysis: Four Hour Chart
ETH was exchanging hands at $1,472 at the time of writing. After Ethereum experienced a sharp drop, it tried to recover slowly but the downward pressure remained strong in the market.
The altcoin’s upper resistance was at $1,542, and the current drop in the price will take ETH to $1,260.
In order for the bearish thesis to be invalidated, Ethereum must be trading above the $1600 price mark for longer than a few trading sessions. If buying power does not show consistency, Ethereum could drop to $1,100 in a matter of time.
ETH volume increased in the last session indicating that buying force is struggling to move north on the chart.
The altcoin over the past 24 hours posted some price increase, although the technical outlook was bearish, the buying force attempted to recover.
The RSI was below half of the line but during the recent trading sessions, there has been a slight rise in the indicator.
This means that buying power is recovering on the 4 hour chart.
Despite the recovery, the altcoin price was below the 20-SMA line, and the reading below the 20-SMA line indicates that sellers are driving the price momentum in the market.
The price drop can be directly linked to a sell signal. Moving average convergence divergence depicts price momentum and its reversals at the same time.
The MACD underwent a bearish crossover and flashing red signal bars associated with a sell signal for the currency.
The directional movement indicator shows the direction of the price and where the currency is heading next. The DMI was negative as the -DI line was above the +DI line.
The average trend indicator (red) was below the 20 mark which means that the current price action is losing steam.
Featured image from UnSplash, chart from TradingView.com