Ethereum Price Analysis: ETH/USD Breakdown Real?
|Ether fell sharply towards $295.00 against the US Dollar after rumors regarding Chinese bitcoin exchanges shut down.|
|The $340.00 resistance proved crucial and might continue to prevent upsides.|
|ETH/BTC declined sharply and even broke the 0.070BTC support.|
Technically, the 4-hours chart indicators tuned lower in the bearish territory.
Ether Price Remains Supported
Yesterday, there was a sharp downside reaction in all major cryptocurrencies, including Bitcoin and Ether due to rumors regarding Chinese bitcoin exchanges shut down.
ETH/USD and ETH/BTC declined sharply below $300.00 and 0.070BTC respectively. Looking at the 4-hour chart of ETH/USD, it also seems like a technical failure near $340.00.
The stated $340.00 level acted as a giant barrier for buyers and protected further upsides. Therefore, I see the recent decline as a technical correction backed by a news event/rumor.
The rejection came from the 50 percent Fibonacci retracement level of the last drop from the $395.41 high to $275.82 low, and therefore it holds a lot of importance.
The pair traded below the 50 percent Fibonacci retracement level of the last leg from the $275.82 low to $341.68 high at $308.00, which is not a good sign. However, there was no complete test of the swing low of $275.00 and the $300.00-295.00 support acted as a decent hurdle for further declines.
Moving on to the hourly chart of ETH/USD, there is a short-term consolidation pattern forming with resistance near $305.00. In addition, two bearish trendlines are positioned to act as a breakout resistance at $305.00.
A successful close above $305.00 would set the tone for further recoveries towards $320.00 or even $330.00. On the downside, the recent low of $293.14 serves a short-term support.
The overall medium term trend is still above $275.00, but short-term downside spikes are possible if buyers fail to push Ether back towards $320.00. In this potential scenario, the sellers may then aim for the next target of $275.00.