Ethereum Dives into Key Liquidity Region as Technical Outlook Grows “Ugly”
- Ethereum has not been able to avoid the impacts of Bitcoin’s recent break beneath $12,000
- This key technical development sent shockwaves throughout the market, with ETH reeling down to lows of $400 before finding any significant support
- Analysts are now noting that the crypto may be well-positioned to see further near-term weakness
- That being said, it may first navigate higher to tap a key liquidity region before it continues its descent
- Overall, analysts are expecting further near-term downside
Ethereum, just like virtually all other major digital assets, has been showing some intense signs of weakness in recent hours – struggling to gain any momentum as it drifts lower.
The cryptocurrency has now reached a key support level that has been stopping it from seeing any major downside.
Despite this, the risk of it plunging even lower is still quite high, as this latest decline struck a blow to its technical strength.
One analyst explained that he doesn’t believe this ongoing decline will lead ETH to below $400, although he does think that another visit to this level may be imminent in the near-term.
Ethereum Declines to Lower-$400 Region During Market-Wide Selloff
At the time of writing, Ethereum is trading down just under 2% at its current price of $414.
Overnight, bears stepped up and sent the crypto reeling as low as $400 before it was able to find some strong support.
This movement lower came about in tandem with that seen by Bitcoin, which plunged as low as $11,600 before finding some strong support.
Prior to the breakdown seen last night, one trader noted that its failure to conduct its “typical” support-resistance flips was a sign that weakness was imminent.
“ETH acted differently last night into today. Rather than typical S/R flips & liquidity grabs into springs, it simply showed weakness all around.”
At the time, he put forth a downside target of $398, which came close to being hit overnight.
Here’s What Analysts Are Saying About ETH’s Current Outlook
In an overnight update, the same analyst explained that he is now looking to flip long on the crypto around its lows of $400.
It is important to note that he is expressing caution when it comes to this position, noting that Ethereum looks “ugly” and that it may see further downside.
“Will probably long near $400 if I get the chance. Probably half-risk though because this…looks ugly and I already made the call yesterday that bulls were extremely weak / market conditions looked to have changed.”
Image Courtesy of Chase_NL. Chart via TradingView.
Unless Bitcoin stabilizes or sees a major near-term rebound, it does appear that further weakness could be imminent for Ethereum.
Featured image from Unsplash. Charts from TradingView.