Ethereum Could Plunge Below $500 Despite Ongoing Rebound, Claims Analyst

• Ethereum has been facing some turbulent price action throughout the past few days and weeks, with the selling pressure seen in the lower-$600 region forcing it lower on multiple occasions
• This has come about due to its close connections to Bitcoin and its price action, with the benchmark crypto’s inability to break $19,800 hampering the growth seen by ETH as well
• Despite the strong rebounds seen following every dip, sellers are still trying to fade the recent rally
• One trader believes that they will soon gain the upper-hand over bulls, noting that there’s a strong possibility that it breaks below $500 in the week ahead

Ethereum has seen some wild volatility throughout the past few days and weeks, with Bitcoin’s selling pressure dragging it lower as well.

However, its rebound following each influx of selling pressure has been incredibly positive and seems to indicate that further upside might be imminent in the near-term.

Whether or not it can climb and hold above $600 should provide some serious insights into where it will trend as the end of the year fast approaches.

One trader believes that some downside is imminent. He expects a sub-$500 dip in the week ahead, noting that it reclaiming its weekly range high is simply a liquidity raid before it sees further downside.

Ethereum Struggles to Gain Momentum as $600 Resistance Holds 

At the time of writing, Ethereum is trading up just under 5% at its current price of $595. This is around the price at which it has been trading throughout the past few days.

Overnight, the crypto plunged as low as $570 before it found some serious support that helped send it flying higher.

However, the resistance around $600 is still intense and may slow its ascent in the near-term.

Analyst: ETH Likely to Plunge Below $500 After Sweeping Liquidity 

One trader explained in a recent tweet that the test of $600 could mark a liquidity sweep that is followed by some serious downside in the mid-term.

“Decided to punt a short here on $ETH as a crypto HEDGE because I am overexposed in #DeFi longs. Reclaimed the weekly range high after a liquidity raid. Currently testing previous support as resistance.”

Image Courtesy of Livercoin. Source: ETHUSD on TradingView.

Bitcoin’s near-term trend will undoubtedly influence Ethereum, which makes it imperative that the cryptocurrency sees further near-term upside.

Featured image from Unsplash.
Charts from TradingView.