Altcoins Analysts Flip Short on Ethereum as Likelihood of a Sharp Decline Grows
Cole Petersen | May 12, 2020 | 20:00
- Ethereum has begun finding immense stability within the $190 region following its recent dip to lows of $180 seen yesterday
- The cryptocurrency has been flashing some immense signs of weakness against its BTC trading pair throughout the past few weeks
- Multiple analysts are now noting that they anticipate ETH to decline further in the days and weeks ahead, potentially seeing losses that send it as low as $150 in the near-term
Ethereum has seen a rough few weeks, as the cryptocurrency has now erased virtually all of the gains that came about as the result of the market-wide upswing seen a couple of weeks ago.
This sharp movement led ETH to highs of over $230 in tandem with Bitcoin climbing into the $9,000 region, but the lack of buying pressure at these highs subsequently led it to decline back to where it started the movement.
Yesterday, Ethereum faced a sharp influx of selling pressure that led it to lows of $180 – a level ardently defended by buyers.
It now appears that the technical weakness stemming from this price action could be enough to send it significantly lower in the days and weeks ahead.
Ethereum Poised to Visit $150 as Technical Weakness Mounts
At the time of writing, Ethereum is trading up marginally at its current price of $190. This slight bounce has allowed it to outperform Bitcoin by 2%.
This price action has largely come about as the result of the cryptocurrency posting a bullish response to yesterday’s dip to $180.
Because buyers were aggressive at this level, it is likely that this level has become strong support.
The key resistance that the crypto currently faces sits between $198 and $200.
This region was previously strong resistance for ETH that was quickly flipped into support, but the latest selloff seen just a few days ago decisively pushed it below this level.
One trader recently noted that he believes this resistance could prove to be the impetus for a sharp movement that ultimately leads the cryptocurrency to decline to lows of $153.
Image Courtesy of Calmly
Trader: ETH Likely to Target Yearly Open Following Series of Lower-Highs
Ethereum’s recent price action has caused it to form a series of lower-highs.
Another respected trader explained in a recent blog post that this trend coupled with its break below $195 have opened the gates for a sharp decline towards its yearly open.
This level happens to sit at $156.
“The close below this level confirmed a series of lower-lows and lower-highs, and whilst price remains below this level I would expect lower prices, with a move back to the yearly open at $156 very much possible,” he explained.
He does note that a decisive push back above $195 could be enough to pivot its market structure back into the favor of buyers.
Featured image from Unplash.
