- Ethereum has seen a sharp decline over the past several hours that has caused it to break back below $400
- This movement came about in tandem with a similar decline seen by Bitcoin and has sent shockwaves throughout the aggregated crypto market
- Analysts are now noting that ETH may be poised to see further near-term weakness, but its bull case remains strong
- One trader is noting that Ethereum has yet to break below a crucial trendline, making a highly bullish pattern still valid in the near-term
Ethereum saw an influx of selling pressure that caused its price to shatter below $400 overnight.
This movement wasn’t isolated to ETH, as Bitcoin and most other major altcoins also witnessed a similar selloff.
It now appears that the cryptocurrency may be in a precarious position as bulls struggle to defend $390. That being said, a recently surmounted descending trendline suggests $380 is the crucial level to watch in the near-term.
As long as Ethereum remains above this level, it may be prone to seeing upside in the near-term.
One analyst even believes the next move higher could lead it towards $500 due to the confluence of a few factors.
Ethereum Shows Signs of Weakness Following Sharp Overnight Decline
At the time of writing, Ethereum is trading down over 4% at its current price of $390. This marks a notable decline from daily highs of $410 that were set yesterday.
These highs came about after bulls started building momentum following the crypto’s break above $400, which came about just over a day ago.
Prior to yesterday’s fleeting breakout, Ethereum had been caught within a bout of sideways trading between $380 and $400. Now that it is once again trading within this range, which of these price levels is broken first should reveal its mid-term outlook.
Analyst: ETH’s Market Structure Suggests a Move to $500 is Possible
Prior to the overnight selloff, one analyst noted that a confluence of factors suggested that a rally towards $500 could be in the cards for Ethereum in the near-term.
Despite this selloff, the crypto still remains above its key support at $380, which appears to make the analysis put forth by the trader still valid.
“Short term downtrend broken on eth, it successfully had everyone flip bearish over the weekend, now it needs to flip these 50 and 100mas on 4h and its clear skies to $500. Not out of danger just but its looking much nicer,” he explained.
Image Courtesy of "SmartContracter." Chart via TradingView.
As long as Ethereum continues holding above this crucial support level, bulls may remain in control of its mid-term trend.
Featured image from Unsplash. Charts from TradingView.