Here’s Why Ethereum Is Primed to Hit $290 After 12% Bounce
- Ethereum has bounced after a punishing drop over the past two days.
- After falling as low as $290 on Saturday, the leading cryptocurrency has recently bounced as high as $355-360.
- This marks a 12-14% move from the local lows, which is actually an outperformance of Bitcoin.
- Some are optimistic that ETH runs back to $390, citing the technical supports it managed to hold above yesterday.
- Not everyone is convinced. A number of traders are still convinced Ethereum hits $290 in the near future.
- Ethereum dropping to $290 from current levels would entail another 18% move lower.
Ethereum Is Primed to Hit $290 in the Near Future: Analysts
A trader is convinced Ethereum hits $290 in the near future after it printed a clear rejection at the $360 resistance level.
He shared the chart below on Sunday morning, showing that the failure to surmount that level is likely setting the cryptocurrency up for a decline to $290, maybe even to $250.
For Ethereum to hit $290 from current levels, it will need to drop 12%. For ETH to hit $250 from current levels, it will need to drop 19%.
Chart of ETH's price action over the past few months with analysis by crypto trader Byzantine General (@Byzgeneral on Twitter). Chart from TradingView.com
The trader above isn’t the first to have eyed the $290 level as a region ETH could near in the short term. One explained that $295 is a macro resistance level, making it likely that Ethereum could test it and bounce off it:
“Truth of the matter is that our region around $295 is the strongest level of support we have on weekly plus timeframes, this would be a major buying region… Personally I have added here at $350, this was my first buy fill in the past few months, next bid $320!”
Chart of ETH's price action over the past year with analysis by crypto trader "CryptoCactus" (@thecryptocactus on Twitter). Chart from TradingView.com
Futures Suggest Relief Is Coming
Futures market trends suggest that relief is coming.
Over the past day, leading Ethereum futures markets on BitMEX, OKEx, and other exchanges have had their funding rates flip negative. The funding rate is the rate that long pays shorts to neutralize the price of the future to the price of the underlying cryptocurrency.
The negative funding rate seen yesterday indicated that sellers were so aggressive that the future was trading below the price of ETH.
Such negative funding rates are often seen before an asset undergoes a bounce. When shorts are paying longs, they are incentivized to close their positions.
Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Charts from TradingView.com Here's Why Bitcoin Is Primed to Hit $290 After 12% Bounce