Ethereum Could See Major Weakness if Bulls are Unable to Defend Key Level
- Ethereum has seen some immense strength over the past few days, with bulls pushing it as high as $395 before it faced some intense selling pressure that slowed its ascent
- The cryptocurrency has been unable to garner any significant buying pressure above $390, likely due to Bitcoin’s position beneath its $11,000 resistance
- Once the benchmark cryptocurrency breaks through, it may create a tailwind that lifts ETH higher
- The recent launch of Uniswap’s UNI token seems to have contributed to ETH’s momentum, as it instantly began rallying from below $370 following news of its launch
- Where it trends next all depends on its reaction to some key levels, with one trader noting that a break below $380 would be grim
Ethereum and the aggregated cryptocurrency market have flashed some signs of strength throughout the past few days and weeks, with buyers pushing most digital assets up against key resistance levels.
It is important to note that, while the market’s outlook remains bullish, there are some factors that may negatively influence where Ethereum trends in the near-term.
One trader is specifically noting that a break below $380 prior to the daily candle close could be grim and lead it to see some serious downside.
This move could be perpetuated if Bitcoin faces yet another rejection at $11,000, which has been a strong resistance level.
Ethereum Struggles to Gain Position Above $390 as Selling Pressure Mounts
At the time of writing, Ethereum is trading down just over 1% at its current price of $386. This is around where the cryptocurrency has been trading throughout the past day, oscillating between lows of $382 and highs of $395.
This consolidation phase has done little to offer insight into its near-term outlook.
There’s a high probability that whether or not it is able to climb back above $400 will depend almost entirely on Bitcoin’s reaction to the resistance between $11,000 and $11,300.
Analyst: ETH Must Stay Above $380 to Maintain Bullish Market Structure
He notes that a dip below this level would invalidate its present bullishness and potentially lead to significant downside.
“ETH / USD: Market still looking pretty strong here, on lower timeframes is seems that $380 has been flipped back into support which is great for momentum, still targeting $400… If we see $380 invalidated then I will be closing a lot of positions across the board in stables.”
Image Courtesy of Cactus. Chart via TradingView.
As Ethereum approaches its weekly candle close, how it continues responding to $380 should offer some significant insights into its mid-term outlook.
Featured image from Unsplash. Charts from TradingView.