Ether Price Down But Not Out
|Ether price declined by more than 6% against the US Dollar during the past three sessions.|
|Bitcoin price crash due to major Chinese bitcoin exchanges suspending withdrawals sparked moves in Ether as well.|
|The ETH/USD pair broke a couple of important supports like $11.25 and $11.00 to register heavy intraday losses.|
Technically, the 4-hours chart indicators moved into the bearish territory with a strong downside momentum.
Ether Price Decline to Continue?
In yesterday’s post, we got to know the importance of $11.20 support. Ether price was seen holding the stated level. Later, the price lost momentum, broke the stated support and moved sharply lower.
There was an event that caught the attention of investors. In a report, the Chinese central bank issued a warning to major bitcoin exchanges in order to take measures to prevent money laundering. As a result, two major China’s bitcoin exchanges, Huobi and OKCoin decided to suspend bitcoin and litecoin withdrawals.
This ignited a sharp selling in Bitcoin, which initiated a downside reaction in Ether as well. The ETH/USD pair fell sharply, and moved below the $11.20 support area to initiate a bearish trend.
The hourly chart suggests that the pair broke a bullish trend line to start a downside move. During the downside move, it broke the $11.00 handle to trade as low as $10.62 before starting a recovery.
The price already corrected a few points higher, but found resistance near the $11.00 area and the 38.2% Fibonacci retracement level of the last decline from the $11.61 high to $10.62 low.
No doubt, the downside move was sharp, and negative. The 4-hour chart also points to the significance of the recent drop. There was a clear break of a bullish trend line at $11.25.
However, the downside move was stalled near the $10.60-10.80 support area. The same area was a resistance earlier, and it is now acting as a support. It also represents the 76.4% Fibonacci retracement level of the last wave from the $10.41 low to $11.61 high.
As long as the price is above $10.60, there can be a recovery towards $11.00-11.20. A daily close below $10.60 might call for additional losses in Ether price going forward.