Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
Like the Bitcoin market, the spot market for the world’s largest altcoin, Ethereum [ETH], also seemed to be crumbling under bearish pressure. At the time of writing, the digital asset had lost 27% of its value over the week, with ETH trading at $1,491. In fact, ETH was trading at a level that was extremely close to its support at $1,479, and if it breaches this level, the altcoin may slide further down the price charts.
Ethereum one-hour chart
Source: ETHUSD on TradingView
Ethereum’s one-hour chart underlined the fact that the cryptocurrency’s value has gradually been restricted within a higher range of $1,569 and $1,413. Over the past couple of days, ETH’s price has hit these extremes, while also returning to oscillate between $1,479 and $1,519.
With the cryptocurrency’s price continuing to move sideways in the press time timeframe, there could emerge selling pressure that might pull the value of ETH lower down the charts to test the support level at $1,413.
Reasoning
The divergence of the Bollinger Bands suggested that the market was becoming more volatile. Such a hike in volatility, combined with falling prices, has contributed to a bearish turn of events in the market.
As its value consolidated, the Relative Strength Index highlighted that the market was in a state of equilibrium. It meant that there were an equal number of buyers and sellers in the market, both of which were keeping the value stable. However, there seemed to be an uptick in the number of sellers, at press time, and this could take ETH to the oversold territory.
Meanwhile, market momentum was picking up since the Awesome Oscillator turned positive and was flashing strong green signals.
Crucial levels to watch out for
Entry-level: $1,479.39
Stop-level: $1,518
Take Profit: $1,418.01
The risk to Reward: 1.56
Conclusion
Ethereum’s short-term chart, at press time, was indicating that the altcoin was consolidating within a short range of $1,479 and $1,519. However, with bearishness and selling pressure across the market rising, the coin may breach its support and head towards another level at $1,413. This could provide an opportunity for traders to short the asset.
