Today has been a wild ride for Bitcoin, seeing ourselves finally break down from the $10,000 zone support. As we are free falling, many other altcoins are following Bitcoin and going down in USD value. Let’s take a look at some technical analysis on Ethereum and see where one of the major altcoins is going to move.
A medium-term analysis on Ethereum (4H)
On the 14th of July, $ETH broke down from the current uptrend at around $290. Since then, price levels have dropped back to support levels around $230 resulting in a 20% move in favor of the bears. Price levels look poised to drop further which will result in a much-needed correction.
On the 4 Hour chart for ETH/USD we can see the uptrend that took price levels to it’s yearly high of around $360. Since then price action has broken this up-trend and dropped 20%. It’s likely we’ll see a correction play out over the next 1/2 weeks. Volume has dropped significantly in comparison to volume levels throughout May.
Key support levels to look out for during the remainder of this correction playing out on ETH are $226, $187, $165. RSI is currently the lowest it’s been in the last few months indicating bears are well in control. Both the 50 MA and 200 EMA have broken down out of the uptrend, POC has yet to move from $271, but will likely come down to $230 within the next few days.
One key factor to look out for when gauging what point to buy on ETH is a clear influx of new volume. Volume levels are quite low, thus any influx of new volume similar to what we previous have seen in May, this will be a pretty strong buy signal. Overall, I’m still very much bullish on Ethereum and I will be looking to buy during this correction phase.
A short-term analysis on Ethereum (30m)
On the 30 minute chart, we can clearly see the break-down take place around $290 resulting in price levels dropping to their current market price. There seems to be little to no green candles or bullish resistance since the break-down leading me to believe there’s further downside to come.
Volume has begun to pick up around $230, with noticeable buying but no real momentum building up that could spur a short-term reversal. It’s likely that we can see some brief sideways consolidation around the current market price before the next move happens, potentially allowing altcoins the chance to flourish.
Providing we do see consolidation around the current market price, bullish divergence could play out on BNB/BTC as predicted in my previous analysis posted in long-term, presenting a great trade or hedge opportunity.
Typically when ETH/USD is dropping, it’s counter-part ETH/BTC builds up bullish momentum so it’s always advised to monitor this correlation for potential trade opportunities.
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