Why markets should forget about $1,000 in Ethereum and prepare for $600
|- Ethereum price drops lower as this week's loss pares gains from last week.
- ETH price is set to continue its decline going into next week.
- The cash exodus continues and ETH price is at risk of falling toward $570.
Ethereum (ETH) price is frustrating traders trying to target any break below $1,000 to catch the price action and be part of a rally that will swing them back to all-time highs into next year. However, that is not how it works in trading, and certainly not in cryptocurrencies. Looking at a weekly chart, it becomes clear that the $1,000 marker does not hold any importance and either needs a bounce off $570 or a break above $1,404 before traders can start taking positions.
ETH price still holds 45% room to the downside
Ethereum price sees traders burning a lot of cash to try and trade around $1,000 to use as entry-level for a rally. Looking at the broader time frame, it pays off to have a look and discover that although it is a psychological level, it does not hold any bearing whatsoever. Instead, it's smack in the middle between either $1,404 to the upside and $570 to the downside. With bulls burning through cash, bears can easily sit on their hands and watch price action drop further in their favor.
ETH price will tank further and could easily still cover another 45% of room to the downside before a significant pivotal level gets reached at $570. The new monthly S1 support level at $647 could already be a sandbox where bears start offloading and closing their short positions. The message here is that bulls must not try to get in the way of the downward steam roller that will smash any bull out of this attempt to catch the dip instead of waiting for the bounce.
ETH/USD weekly chart
As already mentioned, bulls that want to be part of a longer-term rally will instead want to wait for a strong bullish signal to emerge. That could be delivered once price action pops above $1,404 and possibly break the red descending trend line. With that move, the room gets opened up towards $1,688 in an initial phase and next $1,928, flirting with $2,000.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.