Ethereum Could Tank Further; Here’s What The Charts Say


The bear market has been very tough for all major cryptocurrencies including Ethereum. Over the past 24 hours, the coin is down 4%. However, in the past week, Ethereum attempted a recovery. Bears continued to cut prices though.

Ethereum buyers tried to remain calm throughout most of the downturn. The constant push by the bears caused the altcoin to recover, or almost never to recover. The coin’s technical also indicated a further drop in price before Ethereum started rising on the chart again.

On the recent development front, the altcoin announced its potential merger in August of this year. We should see if the altcoin price reacts positively to this news. The possibility of a trend reversal cannot be ruled out as depicted in the chart below.

Ethereum Price Analysis: 1 Day Chart

Ethereum
Ethereum is trading at $1,934 on the 1-day chart | Source: ETHUSD on TradingView

Ethereum was exchanging hands at $1,900 at the time of writing. A continued decline in the price below the current price level may cause the coin to trade at $1,700. If buyers continue to remain scarce, the coin could see an additional 30% drop and trade near $1,200.

On the flip side, the coin can trade slightly above the $2000 mark and then try to trade above the $2200 mark. Ethereum trading volume was still seen in red as downward pressure did not decrease in the market.

Technical Analysis

Ethereum
Ethereum still underbought on the intraday chart | Source: ETHUSD on TradingView

The possibility of a possible pullback cannot be ruled out because the 1 day chart is depicted at the cross of death. A death cross occurs when the short term moving average is lower than the long term moving average. On the SMA, a 20-SMA is seen below the 50-SMA which indicates a weak ETH price in the market.

ETH price was below the 20-SMA line because sellers were driving the price momentum in the market. The RSI was also weak according to other techniques. The RSI was below the zero line, just above the 20 mark. This reading means that sellers are well ahead of buyers at the time of writing.

Ethereum
Ethereum depicts negative price momentum on the intraday chart | Source: ETHUSD on TradingView

Moving average convergence divergence depicts price momentum in the market. MACD histograms are blinking red below the zero line indicating a continuation of the currency’s bearish price movement.

The Awesome Oscillator has also shown green charts below half of the line, according to the MACD. AO flashing charts below the halving line indicate a sell signal for Ethereum.

Related reading | Exchange inflows: Bitcoin and Ethereum rock as the market struggles to recover

Possible price reversal?

Ethereum

Ethereum formed a falling wedge pattern on the intraday chart. A falling wedge pattern associated with a change in the current price action or trend reversal. At the moment, the price of Ethereum is in a bearish momentum.

Due to the formation of a falling wedge pattern, the currency rebound cannot be ignored. In the case of a northbound move, the first resistance was at $2,093 and then $2,200 respectively. In order for the bearish situation to be invalidated, Ethereum must be trading above the $2900 mark.

Related reading | Ethereum prepares to integrate Ropsten Testnet as token struggles to get $2k boost

Featured image from UnSplash, Charts from TradingView.com



Leave a Comment

Your email address will not be published.