Ethereum Price Analysis: Calm Before Another Potential Storm
- ETH/USD price action is moving within consolidation mode, after being allowed some consolidation gains during the previous session.
- Major weekly support levels to note are seen at $130 (July 2017) and then $110 (May 2017).
ETH/USD was provided a consolidation bounce during yesterday’s session. The price managed to close marginally in the green, after the battering it took in the previous two sessions. It had dropped almost 30% within just those two days alone. The pressure appears to be back on from the bears today, after taking a breather from the intense selling pressure.
ETH/USD: Journey Leading to the Recent Drop
Looking back, starting from 7th November, where this chunky selling began, ETH/USD has been one of the most punished during this aggressive bear market. The price has been forced to drop as much as 44% from heights of $225 down to a recent low of around $126, printed during yesterday’s session.
Price action had been moving within a pennant pattern structure formation, which began around mid-September. ETH/USD was trading within the confinements of this for nine weeks, before it broke out the downside. This set up coming after an initial sell-off, to consolidate within a pennant, is typically seen as a bearish indicator. The deep drop seen since has proven to be the case.
What Now for ETH/USD?
Looking via the 4-hour chart view, price action once again is moving within consolidation mode. As a result, the price has been able to stabilize somewhat after the intensity of selling from 18th November picked up the pace. The bears had smashed through support which was seen within the range of $180 down to $160. This area had supported the price in September and most recently from 15-18 November.
Keeping in mind, as noted above, with the recent price behavior it does still spell potential vulnerabilities to the downside. The price is forming and moving within a consolidation or range block, which is subject to another breakout to the downside. The upper part of the range is seen at $150, with the low at $126 very much narrowing, which is also an indicator of a pending breakout.
ETH/USD at present is trading around weekly support seen below at $130, the July 2017 low. Furthermore, eyes will be on whether the bears manage to maintain current downside momentum and force a break of the mentioned lower support of the range, $126. A breach could open the door to a fresh wave of selling. The next key area would be seen down at $110, the weekly support of May 2017.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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