Ethereum’s Market Structure Weakens as Bulls Fail to Break Key Resistance
- Ethereum’s overnight price action has done little to offer insight into its near-term trend, as the cryptocurrency has been unable to maintain its recent momentum
- This, however, has not resulted in it seeing any type of sharp decline, with its rejection at $380 kicking off a consolidation phase
- Analysts believe that where the cryptocurrency trends next depends wholly on its reaction to one vital resistance level that has been suppressing its price action
- This resistance was previously strong support for ETH, but the price below it degraded the crypto’s market structure and converted it to resistance
Ethereum has been caught in a bout of sideways trading throughout the past day, being unable to fund any strong momentum in one direction or another.
Its sideways trading has done little to offer insight into its near-term outlook, and all eyes rest firmly on Bitcoin for insight into the cryptocurrency’s next trend.
Much like ETH, BTC is also caught within a short-term consolidation phase following the upswing seen yesterday.
This movement led BTC to highs of $10,500 before it faced selling pressure that has since led it to range between these highs and its $10,200 support.
One analyst is growing bearish on Ethereum, however, as he does not believe that the resistance just above the crypto’s current price region will be surmounted by bulls anytime soon.
As such, he is now eyeing a move into the $200 region.
Ethereum Consolidates Following Rejection at $380
At the time of writing, Ethereum is trading down 1% at its current price of $365, which marks a notable decline from recent highs of $380 that were set around this time yesterday.
The rejection at these highs came about in tandem with Bitcoin’s rejection at $10,500, signaling that the benchmark cryptocurrency remains in full control of the market.
If the crypto is unable to surmount this previous support level in the near-term, it could have grave implications for where it trends next.
$380 Likely to Be Insurmountable for ETH – Claims Analyst
While speaking about this level, one analyst explained that this is looking to short Ethereum once it reaches here.
He notes that his take profit target sits somewhere between $250 and $290, signaling that a major downside movement may be imminent.
“ETH plan is as follows: Short above red if weakness is present LTF. Take profit between the green levels if strength is present.”
Image Courtesy of Cold Blooded Shiller. Chart via TradingView.
How Ethereum’s bulls continue responding to $380 may depend largely on Bitcoin’s near-term outlook.
Featured image from Unsplash. Charts from TradingView.