- Ethereum price has breached its ascending parallel channel, hinting at a descent.
- Investors should expect a steep correction to $2,000 if the immediate support level at $2,541 gives.
- A daily candlestick close above $3,000 will invalidate the bearish thesis for ETH.
Ethereum price looked like it was handling the May 5 FOMC crash well, but there have been unwanted developments over the last 24 hours. Essentially, things have worsened for ETH and a breakdown of a significant support level hints that a further downswing is likely.
Ethereum price recovery plans in shambles
Ethereum price action since January 22 has created two higher highs and three higher lows, which when connected using trend lines describe an ascending parallel channel.
As mentioned in previous articles, the last two times ETH tagged the ascending parallel channel’s lower trend line, there was a bullish reaction. Ethereum price rallied roughly 40% as a result.
However, due to the lack of bullish volatility in Bitcoin price, the third retest of the channel’s lower trend line on May 2 was weak. The FOMC crash on May 5 indicated that the sellers can easily overpower the buyers and can do that for a long time.
As a result, Ethereum price has shattered the setup, triggering a bearish breakdown. The $2,541 is the immediate and last line of defense for the smart contract token. A flip of this support into a hurdle will be fatal and trigger a 21% nosedive to $2,000.
ETH/USDT 1-day chart
While things are looking up for Ethereum price, a daily candlestick close above $3,000 will have overcome the 100-day SMA at $2,922, as a result, invalidating the bearish thesis for ETH. after this, Ethereum bulls need to set a higher high relative to the April 21 swing high at $3,186 before heading higher.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
SEC Chair Gensler hints at resignation amid lawsuit from 18 states accusing the regulator of unlawful overreach
In a filing on Thursday, 18 states, along with the DeFi Education Fund, issued a lawsuit against the Securities and Exchange Commission, alleging that the regulator's crackdown on the crypto industry has been unlawful and unconstitutional.
Bitcoin Price Forecast: BTC eyes $100K, what are the key factors to watch out for?
Bitcoin trades below $90K in the Asian session on Friday as investors realized nearly $8 billion in profits in the past two days. Despite the profit-taking, Bitwise CIO Matt Hougan suggested that BTC could be ready for the $100K level, fueled by increased stablecoin supply and potential government investment.
Ethereum Price Forecast: ETH could rally to $4,522 despite mixed on-chain flows among investors
Ethereum is down over 1% on Thursday following record net inflows across ETH exchange-traded funds in the past six days. Despite the bullish market outlook, $300 million worth of unstaked ETH could hit the market and cause downward pressure on prices.
Crypto Today: Bhutan sells $33M BTC, McDonald’s launches NFTs, PEPE, SUI emerge top gainers
The aggregate cryptocurrency market capitalization shrank by 1.45% on November 14, reflecting a $42.6 billion dip. In the last 24 hours, 170,878 traders were liquidated to the tune of $485.13 million, per Coinglass data.
Bitcoin: Further upside likely after hitting new all-time high
Bitcoin hit a fresh high of $76,849 on Thursday as crypto-friendly candidate Donald Trump won the US presidential election. Institutional demand returned with the highest single-day inflow on Thursday since the ETFs’ launch in January.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.