Ethereum Price Analysis: Is this a Bottoming or Set-up for Another Deep Drop?
- ETH/USD price does not appear to be out of danger yet, given current technical set up possibilities.
- For greater buying pressure to be seen, the bulls must break $130 to the upside.
ETH/USD price action continues to show little signs of commitment, from either the bear or bull camps. Since the hard selling from 7th up until 22nd November, the market has been within consolidation mode. Price is currently moving within a range-bound nature, moving between a high of $130 down to a low of $102. This has been the case over the past 10 trading sessions. The buyers have been heavily defending the big psychological $100 mark from being broken. Many participants believe the bottom has been seen but given the current behavior this remains very unclear.
Bottom or Bearish Flag
Since the drop of November kicked in on the 7th, ETH/USD has lost well-over 50%. During that fall, from a technical view, it can be described as a ‘pole’. This being the pole to a potential bearish flag. What further backs this possibility is the way in which the price is moving now – seemingly playing out to the textbook, consolidating after a deep fall, ahead of a continued move south. It had formed a range-block – this can also be deemed as a flag pattern formation, subject to that extended move south.
Despite the price having stabilized from the big waves of selling, the bulls appear to be very much reluctant to commit. Several sessions have passed now, and yet ETH/USD is yet to see any decent rally to the upside. This even coming after reassurance of a firm protection of that $100 level. Given all that is detailed from current technical observations, the market appears to be stacked in the favor of the bears for now. It is just whether momentum will be picked back up here for another firm retest of the well defended recent low area.
For any decent buying to come back to ETH/USD, the bulls must push for a breakout of this mundane trading range. A breach of the upper part of that must be seen, which is noted at $130. Should this occur, expect a chunky wave of buying pressure come back into play. This could very quickly see the price driven back towards $200. Ahead of that sees a former demand zone, which may cause a slight slowdown. It had provided support to ETH/USD from September, before it was smashed through on the 19th November. The new likely resistance is tracking from $165-$180.
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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