The 40 percent month-on-month decline of ethereum’s ether cryptocurrency has pushed the long-term price floor down to $300, the technical charts indicate.
As of writing, the world’s second largest cryptocurrency by market capitalization is changing hands at $534, as per CoinMarketCap.
Stepping back, ether’s sharp reversal from the Feb. 6 low of $555 (prices as per Coinbase) and the rally to near $1,000 in the subsequent days meant the cryptocurrency had established a strong price floor below $600. That now looks to have been pushed down.
Daily chart
As seen on the chart above, ETH left lower highs around the key descending trendline, as the rally from Feb. 6 lows ran out of steam and sellers took over after the cryptocurrency fell below its 100-day moving average (MA) on March 6.
The transfer of power from bulls to bears pushed the price down to $450 on March 18 – the lowest level since Dec. 11.
During that process, the cryptocurrency also witnessed a head-and-shoulders reversal on March 14 – indicating that the rally from the December 2016 low of $5.81 has ended and the bears have regained control. Further, a 50-day MA and the 100-day MA bearish crossover was confirmed on March 15.
So, ETH will likely find acceptance below $546 (61.8 percent Fibonacci retracement of December 2016 to January 2018 rally) and extend the drop to $300 (78.6 percent Fibonacci retracement) over the next couple of months.
View
- The price floor looks to have dropped to $300.
- That said, oversold conditions in the near-term may help ETH defend the March 18 low of $450.
- Only a convincing move above the head-and-shoulders neckline resistance (former support now seen at $661) would abort the bearish view.
- A move above $982 would signal a long-run bearish-to-bullish trend change.
ETH/BTC chart
- The head-and-shoulders breakdown has opened the gates for a drop to BTC 0.045 (78.6 percent Fibonacci retracement).
- In the short-term, oversold conditions could yield a minor corrective rally to the neckline resistance, currently seen around BTC 0.072.
- A long-term bullish reversal is seen only above BTC 0.0895 (Feb. 26 high).
Ether image via Shutterstock
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.
Source: CoinDesk
