Ether price after a heavy rise towards $21 faced a lot of selling pressure, and tumbled as soon as reports of DAO under attack hit the news wires.
Ethereum price as forecasted in yesterday’s post traded above the $20.0 level, but it failed to stay above it.
There were reports that DAO was under attack, and approximately 3.5 million ether were withdrawn from the smart contract.
ETH/USD price crashed and moved down by more than $5 to trade from to $21 to $16.
Ether buyers may be in a real pain if they bought ETH at a higher price, as ETH/USD moved down sharply during the past few hours.
Ether Price Reversal?
There were a few nasty moves in ETH noted during the past few hours. Earlier, the price continued to move higher and broke my yesterday’s highlighted target of $20.0. ETH/USD traded towards $21.0 where sellers appeared.
Later, there were reports that DAO was under attack, which ignited a sharp downside move in almost all pairs of ETH like ETH/USD and ETH/BTC. ETH/USD simply collapsed, broke a major support area of $19.00 (as shown with a yellow line on the last 24 hours chart). It traded towards $16.00 as of writing, and it looks like there are chances of more losses in the short term.
The report highlighting that approximately 3.5 million ether were withdrawn from the smart contract got the attention of sellers, and suddenly there was a solid increase in trading volumes with sellers in control to push the price down.
Looking at the last 7-days chart of ETH/USD, there was a bullish trend line break during the downside move. If the price attempts to recover from the current levels, then the broken support of $19.00 may now act as a resistance.
I would suggest not to enter any buy trade at this point in ETH/USD and wait for the price to settle down.
Important Resistance Level
Important Support Level
The RSI sharply moved down below the 50 level, pointing towards the strength of the recent move in ETH.
The MACD is strongly placed in the bearish zone, which is a negative sign.
Aayush has spent over seven years as a financial markets contributor and observer. He specializes in market strategies and technical analysis, comes with an IT background. He possess strong technical analytical skills and is well known for his entertaining and informative analysis of the currency and commodities markets. He is a software engineer by profession, loves blogging and observing financial marketsETHNews is commited to its Editorial Policy
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