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Analysis

Here’s what could determine Ethereum’s trajectory over the coming days

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Source: Pixabay

The global cryptocurrency market took yet another beating in what was its seventh straight bear market in a row. The world’s largest altcoin-Ethereum was also under the pump and lost ground on its phycological $2,000 level. With a down-channel still active on its 12-hour chart, prices could dip lower and find safe haven in a support zone between $1,730 and $1,915.

Ethereum 12-hour chart

Source: ETH/USD, TradingView

Ethereum’s chart highlighted a breakout attempt from its down-channel but the same was denied at $2,260-resistance. With sellers back in control, ETH slipped back in its pattern and eyed a move into its support zone of $1,730-$1,915. This area was not only critical to ETH’s recovery but would also determine its trajectory over the coming days. Cutting losses in this region would likely result in a breakout back towards $2,260.

Any further upside could be denied by the 20-Simple Moving Average which acted as a resistance line. On the other hand, failing to cut losses between the defensive region could drag ETH all the way towards its 28 Feb swing low of $1,315.

Reasoning 

Momentum was clearly on the bearish side, as highlighted by both Awesome Oscillator and MACD.¬†Relative Strength Index has failed to rise above 50 as weakness has persisted in the market since 19th May. However, a fall to the oversold region does warrant a reversal which would lead to pick-up in prices. The question that remains is whether ETH’s support zone would alleviate incoming selling pressure.

The Visible Range highlighted a point of control at $1,743. At this price point, trading interest for ETH as at its peak in the given timeframe, and a further breakdown was unlikely. In case of a breakout from its pattern, bulls would likely target a rise back towards $2,260 but there was no guarantee whether ETH would be able to sustain this level.

Conclusion 

Ethereum’s downtrend could drag the digital asset within a support zone of $1,730 and $1,915- an area where buyers would most likely return to the market. Visible Range highlighted a point of control at $1,743 and an extended sell-off could be avoided. If bears do dominate over the coming days, ETH could fall back towards its late-February levels of $1,320.

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A business graduate with a keen interest in emerging markets across South East Asia. As a financial journalist, he covered stocks and market reports across Australia and New Zealand as well.

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