Ethereum Price Analysis: ETH/USD Set for $100 Breach, What Next?

  • ETH/USD has dropped a chunky 55 percent since the 7th November. Bears continue to smash through key area of support.
  • A daily closure below $109.80 (27th May 2017 low) could be devastating, in opening the door for a firm breach of the psychological $100 mark.

Selling Pressure in the Highest Gear

ETH/USD daily chart

ETH/USD selling pressure intensity remains very high on Sunday. The ETH price has taken a battering from the market bears, as seen with most of the market. The recent bearish trend started back on 7th November, where the price was trading around $225. To date it has fallen as much as 55% from early November. Out of the last 19 trading sessions, ETH/USD has only managed to close in the green briefly on just 3 occasions; this demonstrates how strong this move south is.

A bearish technical structure that has cropped up often across the crypto market is the pennant pattern. ETH/USD was moving within such as set up from 13th September, right up until 14 November, where a deep breach was caused by the bears. This is really where the market bears move into full gear with consistent pressure. Since the mentioned breakout, volumes have remained at their highest levels since mid-September.

After pennant being exposed to the downside, eyes were on a demand area, to potentially catch the falling price. This was seen tracking around $180 down to $165 area. ETH/USD had previously seen buyers coming in on 12th September after falling into this zone. A reversal candlestick was formed at the time, seeing the price run up to $255 territory, gaining some 50% along the way.

Support Levels

ETH/USD weekly chart

ETH/USD is trading at its lowest level since 19th May 2017. During the Saturday session, the price remained supported at the key level of $109.80. This was a big daily support, seen on 27th May 2017. The bears have forced a breach at the time of writing today, however the daily closure below would be the devasting blow. As a result, it would open the door for a drop below the big psychological $100 mark.

The low print of 19th May 2017 would be the next major area of support that will be eyed. This is noted at $98.25. Further south, $88.95 should be marked as another potential safety net for the falling price. It is daily support, the low of 18th May, but also where the price consolidated from 4th May up until the 18th. Lastly, if looking at a worst case scenario, with any failure of the above proving support, then a fast return to the $50 territory would likely be seen.

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.

Featured image courtesy of Shutterstock.

Author:
Ken has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.