- Ethereum and the entire crypto market saw a sharp downturn, with Bitcoin plunging by over 10% while ETH declined towards $500
- This selling pressure has been quite intense and may continue hampering the cryptocurrency in the near-term
- Where it trends in the near-term will depend largely on whether or not bulls can stop it from breaking below $500
- A decline beneath this level would strike a serious blow to the cryptocurrency’s technical outlook
- The coming few days and weeks will likely determine the fate of the crypto market for the months and even years to come
Ethereum is in the process of reeling to its key $500 support level, with the selling pressure seen at its $620 highs recently proving to be quite intense.
The rejection here certainly sparked this movement, but it was primarily perpetuated by recent comments from the U.S. Treasury Secretary regarding potentially imminent regulations on the crypto space.
These regulations would target private wallets and require that companies make their users use KYC to use them. This would strike a devastating blow to the DeFi ecosystem especially, while also hurting the broader market.
There’s no doubt that this is why the crypto market is reeling lower today. However, it remains unclear whether these regulations will be pushed through before the executive branch’s leadership changes in January.
Ethereum Plunges as Analysts Eye Key Support Level
At the time of writing, Ethereum is trading down just over 11% at its current price of $490. This marks a serious plunge from its recent highs of $620 set just a few days ago.
Where it trends in the mid-term will depend largely on its continued reaction to the support that exists around its current price level.
Any sharp decline here could lead it to see some major downside in the days and weeks ahead.
Analyst Claims ETH Could Be Providing a Buying Opportunity
One analyst explained in a recent tweet that this ongoing Ethereum decline could be providing buyers with an ideal opportunity to buy into the cryptocurrency.
He notes that its monthly chart, the macroclimate of the market, and some technical factors indicate it could be poised to see a serious rebound.
“I had zero ETH exposure since I got stopped on the knife-catch, but this dip looks like the best buy opportunity we can currently hope for. Taking into consideration the Monthly chart, H12 and the market cycle conditions.”
Image Courtesy of Livercoin. Source: ETHUSD on TradingView.
The coming few days should provide some serious insight into where Ethereum and the entire market will trend in the days, weeks, and months ahead.
Featured image from Unsplash. Charts from TradingView.