Over the past 24 hours, the Bitcoin price has slightly increased and now the original cryptocurrency sits around $42,500. The Bitcoin trading volume began dropping and totaled $33 billion. Altcoins showed more positive dynamics, growing on average by 3-4%.
Let’s take a look at the chart of the most popular altcoin – Ethereum:
Over the last 7 days, the ETH price has dropped 17% from $3,800 to $3,200. Meanwhile, Bitcoin declined by only 8.7%. This suggests that capital flows from Ethereum to stablecoins or Bitcoin. Anyway, buyers remain mainly passive.
On Monday, the ETH chart broke through the important psychological mark of $3,000 and fell to $2,927. Only then did the buyers become more active and manage to push the price back up. However, this is a rather weak rebound which speaks of the uncertainty prevailing in the market. As a rule, situations like that lead to repeated declines.
As of today, Ethereum – along with Bitcoin – has been in a downtrend for 2 months. There are no strong reversal patterns on the chart, and that is why we believe that the price will continue dropping even more dramatically. We expect to see a strong fight in the $3,800 – $3,900 range which is also a key support level based on several signs. Moreover, the annual moving average (MA365) is approaching this area, and Ethereum will tend to reach it as well.
Most of the market participants placed stop-loss orders below $3,800. This means that when the price breaks through this level, a sharp drop may occur due to the triggering of stop-losses. This will cause massive liquidations in the market. Potentially, the price may drop to the local support level of $2,400 – $2,500. This means that Ethereum may lose another 25-30% of its value.
The scenario of growth remains possible but the chances are still low as uncertainty reigns over the market. Crypto newbies are selling their coins which provokes another price reduction. In addition, the negative events that take place in the stock market have an impact on the crypto industry. Taken together, all these factors may lead to an overall crash in the next few weeks.