Technical Analysis and Market Entry: Ethereum Testing Critical Ascending Trend Line of Support
- Ethereum’s price remains at the mercy of the market bears, as the price remains stuck within a stubborn trend south.
- ETH/USD was forced to give up the psychological $200 mark, which creates vulnerabilities to the downside.
ETH/USD: Recent Price Behavior
The Ethereum price remains under pressure and well within the control of the market bears. ETH/USD is still yet to escape the aggressive trend to the downside, which has been in play since 26th June. It has dropped around 40% since this date, being forced down to its lowest level since 11th May.
Between the period of 14th July to 8th August, price action was consolidating, moving within a pennant structure. On 9th August the bears broke out to the downside from the pattern, seeing a retest on 11th August, leaving the door open to further selling. ETH/USD has been forced to seek some comfort from a massive area of demand, $180-$160.
In proximity to the noted area of demand, an ascending trend line has been in play since mid-December 2018. ETH/USD has required the support of this on several occasions recently, from 13th August to date. It has been tested several times, which would suggest some potential vulnerabilities to the downside.
What if the Key Support Area Breaks?
Should the above-detailed support areas break, it could invite a fresh wave of sellers. A breach would spark much in the way of panic selling. ETH could very well be led to a free-fall, with the price returning down to pre-2019 bull run levels.
The price began its recovery late in December 2018, down at depressed levels of $80. Following this yearly low, bullish momentum managed to quickly regather pace to the upside. ETH/USD was able to gain as much as 340%, rallying up to $360 on 26th June, the highest price since 10th August 2018.
If a daily break and closure are seen below the noted ascending trend line, then further shorts to the downside would be attractive. In terms of targets to the downside; $150, followed by the $100-$80 price range should be eyed. Should the bulls regather upside momentum by breaking out the bearish pennant, then this could change the current trend. While price remains supported by the ascending trend line, it does put off a stronger wave of sellers for now.
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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