- Ethereum’s short-term market structure has been flashing some signs of weakness as of late
- Although the cryptocurrency has mainly been consolidating and has lacked directionality, there is currently significant uncertainty within the entire crypto market
- This could continue perpetuating investor fear, potentially causing assets like ETH to see further downside in the days and weeks ahead
- One trader is particularly watching for another $300 test for the cryptocurrency, noting that although its short-term outlook is shaky, its macro market structure is strong
- He notes that this potential decline likely won’t cut any deeper than $300 due to an abundance of technical support levels
Bitcoin’s unrelenting consolidation phase has done little to provide other cryptocurrencies – like Ethereum – with any clear directionality, causing the entire market to fall into a prolonged period of consolidation.
This has proven to be particularly impactful for altcoins within the DeFi sector, which are largely considered to be “high beta” assets that carry heightened risk and volatility over their larger counterparts.
Ethereum, however, has simply been tracking Bitcoin’s every move, struggling to gain any independent momentum.
One trader is now noting that this could lead it down to $300 before it finds any significant support.
Ethereum Tracks Bitcoin’s Every Move as Entire Market Consolidates
At the time of writing, Ethereum is trading up just under 1% at its current price of $350. This is around where it has been trading for the past few days.
Bitcoin similarly has been stuck between $10,500 and $10,600, struggling to provide the entire market with a trend.
At the moment, Ethereum is trading well-above its recent lows of $315 that were set during a strong selloff last week.
Here’s Why ETH Could Soon Test $300
One analyst believes that Ethereum could be in for some further short-term weakness, despite flashing signs of strength on its macro chart.
He notes that it is “very possible” that ETH tests $300 in the near-term, before hitting some massive technical support levels.
“ETH / USD: Personally with so much uncertainty in the market it is very possible we see a $300 region retest, that said honestly HTF structure is looking great, lots of EMA support below us… In 2018/2019 the 55 EMA was consistently resistance, price now trending well above!”
Image Courtesy of Cactus. Chart via TradingView.
Unless Bitcoin rallies higher and creates a tailwind for Ethereum, mounting uncertainty amongst investors may continue plaguing its near-term outlook.
Featured image from Unsplash. Charts from TradingView.
