The recent steep drop in Ethereum has dashed hopes for a long-term upswing. With a decline below its rising trendline, the cryptocurrency’s upward momentum has reversed.
With ETH now trading at about $2,400, a dangerously low level for the second-largest cryptocurrency by market capitalization, this breakdown has forced the asset below the crucial $2,500 barrier.
The $2,500 barrier was broken. Falling below this mark indicates that Ethereum might be headed for more losses, as it has historically acted as a crucial support zone.
The bearish outlook is further supported by the declining volume that accompanies this decline. Less buying interest is usually indicated by lower trading volume during a price decline, which could make the current downtrend worse.
Because it indicates that the recent rally that had given investors hope is coming to an end, the break below the ascending trendline is especially concerning.
Ethereum may find it difficult to regain its footing in the near future, as this trendline is now functioning as resistance.
Traders and investors should prepare for possible further downside as Ethereum remains around $2,400.
The price of Bitcoin dropped sharply recently, returning to the 200-day Exponential Moving Average.
The confidence of traders who were expecting a long-term rally is shaken by this move, which is an indication of an impending price correction and possible trend reversal.
A $200 million market wipeout has caused investors to become concerned about the short-term viability of Bitcoin.
A significant decline in market capitalization like this might lead to increased selling pressure and a possible drop in price.
Given that the 200 EMA has traditionally been a crucial support level, it is alarming that Bitcoin has been unable to stay above it.
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