Ethereum at Risk of Seeing Major Downside; Here’s What Analysts are Watching
- Ethereum has seen mixed price action over the past couple of weeks
- After rallying to highs of nearly $450 last week, the crypto faced an insurmountable influx of selling pressure that forced it lower
- Initially, this decline forced ETH to lows of $398 before it bounced towards $420, but today it faced another bout of selling pressure that sent it back to its $400 support
- Analysts are now starting to grow increasingly bearish on the crypto, noting that it is likely to see a further pullback in the days ahead
Ethereum and the aggregated crypto market are facing mixed price action as of late. Although some smaller altcoins remain firmly bullish, Bitcoin is still stuck below $12,000 while ETH struggles to hold above $400.
This price action has done little to offer investors with insight into the market’s near-term outlook.
One analyst who previously forecasted ETH’s run to $450 is now growing cautious on the crypto.
He is noting that a move towards $395 seems likely in the short-term and that a failure for it to close its weekly candle above $400 could be grave.
Ethereum Struggles to Hold Above $400 as Selling Pressure Mounts
At the time of writing, Ethereum is trading down over 2% at its current price of $407. This marks a notable rebound from lows of precisely $400 that were hit earlier this morning.
The ardent reaction to this level highlights just how important it is for the cryptocurrency’s near-term outlook.
A failure for it to hold above this level could have grave implications for where it trends in the days and weeks to come.
Earlier this week, sellers catalyzed a sharp decline that led it down to lows of roughly $398. This dip was absorbed by buyers, who then sent Ethereum up to highs of $420.
These two levels may mark the upper and lower boundaries of a trading range that should be closely watched in the near-term.
Here’s What Analysts are Saying About Ethereum’s Decline to $400
While speaking about Ethereum, the analyst who forecasted its rally to highs of $450 explained that it is starting to express some bearish signs.
He notes that a weekly close beneath $400 would be a grave sign for its mid-term outlook.
“ETH / USD: LTF looking a little more bearish for the time being seems as though a pullback from here is more than likely, PA seems to have confirmed previous support at $420 into resistance and RL test at $395 seems likely again… Weekly close below $400 would signal HTF PB,” he said.
Image Courtesy of Crypto Cactus. Chart via TradingView.
The coming few days should provide insight into whether or not this ongoing bout of weakness is emblematic of something larger.
Featured image from Unsplash. Charts from TradingView.