Analyst: Ethereum Likely to Plunge to $370 as It Reaches Key Resistance
- Ethereum saw a sharp and sudden upswing yesterday that allowed it to post some notable gains
- The cryptocurrency has now resecured its position within the lower-$400 region, with bulls building major strength following the break above its key resistance level
- That being said, analysts are still noting that massive resistance that exists right around $408 may prove to be insurmountable in the near-term
- The selling pressure here may open the gates for ETH to see a significant downside movement
Ethereum has been one of the strongest major digital assets throughout the past couple of months, with its bull catalyzing significant momentum that has allowed it to far outperform Bitcoin and many other altcoins.
After rallying to highs of nearly $450 just a couple weeks ago, the crypto lost its momentum and ultimately slid as low as $380.
Bulls are now fighting back, however, and appear to be looking to spark a movement that sends ETH rallying up towards its yearly highs in the near-term.
Analysts are noting that it isn’t out of the woods yet, as it has failed to surmount a crucial resistance level and may be forming a bearish head and shoulders pattern.
Ethereum Reaches Critical Near-Term Resistance as Momentum Slows
At the time of writing, Ethereum is trading up over 4% at its current price of $407. This marks a notable upswing from daily lows of $380 that were set during its recent decline.
It is important to note that ETH’s price ran as high as $408 this morning before it faced significant selling pressure.
This is a level of resistance that analysts were closely watching prior to the crypto’s break above $400 overnight, and one trader is shorting this level with a downside target of roughly $370.
“ETH: I think bulls give it a strong go here considering the consolidation of the past 2 days, but will ultimately fail. Only one way to find out. Moved my shorts up a tad from previous analysis.”
Image Courtesy of Chase_NL. Chart via TradingView.
This Head and Shoulders Pattern Could Lead ETH to $320
This can be seen while looking towards the chart below, with a break of the neckline at roughly $380 potentially leading ETH as low as $320.
“ETH: H&S possibility continues. 320-350 if 380 breaks,” he explained.
Image Courtesy of Josh Olszewicz. Chart via TradingView.
How the crypto trends in the next few hours should reveal whether or not this latest rally will be fleeting, or emblematic of a bull-favoring trend shift.
Featured image from Unsplash. Charts from TradingView.