Ethereum Double Top Rejected as Market Slides — Price Analysis

  • LTF (Low timeframe) trend: Down with some relief rallies due
  • MTF trend: We are likely seeing the start of a downtrend
  • HTF trend: Uptrend still strong but needs consolidation

Yesterday, we warned here of clear warning signs in the Ethereum (ETH) market, and indeed Ethereum saw more than 10% of losses shortly after. The prospect of a longer-term consolidation in the crypto markets is now looking more likely, and we consider the scope of a possible retracement.

Starting on the daily ETH/Dollar chart, we see a good case for a retrace above $230, within the blue band. There are three confluent support levels all coming together around $240, which lend weight to this theory.

$230 is the first hopeETH chart by TradingView

First, this is where the first major support level comes in, traced from earlier price history (the blue band); second, the 21 EMA is trending up right through this area, and is almost definitely going to be tested; the third is the .382 Fibonacci level, which often holds as a retracement target in bullish markets (like Ethereum’s now).

If we switch over to the ETH/Bitcoin chart, a 3-day, we see that ETH actually has plenty of room down to retrace. The critical area to maintain is the ₿0.0231 level; in fact this is the only really critical area that must be maintained, as it marks many important points: it is the high of the previous regional structure, the breakout point of the present market structure, and the ‘Capitulation Line’ from 2019 where Ethereum’s Bitcoin price dropped into 2017 levels.

As long as this doesn't break, we're fineETH chart by TradingView

The market is thus very aware of this level, and we should expect support to come in if it comes to that. However, given ETH’s HTF bullishness, we might expect – just as on the dollar pairing – for price not to fall below the .382 retracement level.

It seems like the blistering Ethereum rally of early 2020 has drawn to a close, for now. There is plenty of room for the MTF trend to turn bearish while maintaining a bullish HTF outlook, and we will have more information regarding the overall strength of the market if we get that downtrend.

The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.

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