November 10, 2016 11:19 AM
Ether price is under pressure at present versus the USD, and looking at the charts it looks like ETH/USD may extend its downside move.
Ether price traded lower yesterday against the US Dollar, and after a minor correction it moved down once again.
The recent correction found resistance near $10.80, as highlighted in yesterday’s analysis.
There is a monster bearish break visible in the 4-hours chart of ETH/USD, which may ignite further losses.
Technically, the indicators on the hourly chart are well below the neutral level, suggesting a bearish bias.
Ether Price Heading Lower?
Yesterday, we saw how Ether price declined towards $10.00 versus the US Dollar before starting a recovery. During the correction phase, the ETH/USD pair traded towards the $10.80 level. The stated level acted as a perfect resistance, as highlighted in the yesterday’s analysis and prevented any further gains.
It was a perfect example of how a support area can later act as a solid resistance. Another important point about the recent rejection was the fact that the pair failed near the 50% Fibonacci retracement level of the last decline from the $11.30 high to $10.24 low.
So, the recent rejection near $10.75-80 can be considered as completion of the correction. The price has already resumed its downtrend, and the chances of it testing the recent low $10.24 once again are very high.
Now, let us try to understand why the recent break below $10.80 was crucial. Looking at the 4-hours chart of ETH/USD, there was a contracting triangle pattern formed. During yesterday’s downside move, the pattern was broken to ignite a bearish wave.
We can see it as the first sign of a bear trend. And, in such cases the price always corrects once to retest the broken support, which happened recently when the price retested $10.80. All these are signs that the ETH/USD pair may continue to trade lower. The next major support where the pair may find buyers is at $10.00.
Important Resistance Levels
$10.70 and $10.80
Important Support Levels
$10.25 and $10.00
The RSI technical indicator just tested the neutral level, failed and now moving south.
The MACD is positioned in the bearish slope, and may extend it.
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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