- Ethereum price continues to drop, halting its short-term recovery rally after the recent 19% crash.
- ETH is likely to sweep the $1,521 swing low before attempting another bounce to $1,675.
- A continuation of the selling pressure could prematurely send the smart contract token to 1,478 or lower.
Ethereum price remains a beta asset relative to Bitcoin price as it has dropped nearly 8% over the last twelve hours while BTC has slid roughly 4%. This development indicates that the upcoming Merge update, where the asset will shift from Proof-of-Work (PoW) to Proof-of-Stake (PoS), has not had any hand in reducing the high degree of correlation that exists between the two assets.
Ethereum price remains highly suggestible
Ethereum price crashed roughly 19% as it followed Bitcoin’s footsteps between August 18 and 20. While a recovery seemed to be ongoing, the recent spike in selling pressure in BTC price has caused ETH to revert prematurely. The only chance that the bounce could be triggered again is if Bitcoin price sweeps the $20,750 equal lows or if Ethereum price sweeps the $1,521 swing low formed on August 21.
Preferably, if the former outlook happens first, then the second scenario will not matter for any recovery attempt. As for the upside targets, ETH investors can expect a minor run-up to $1,675 to fill the inefficiency and trigger its reversal here.
In some odd cases, this leg-up could extend to $1,730 and form a ceiling there before reversing and continuing its downtrend. Regardless of where the local top forms, Ethereum price is due to retesting the imbalance to the downside at $1,474.
However, ETH might revisit the $1,280 support level if the selling pressure continues to build up.
ETH/USD 4-hour chart
Although the recovery targets are not set in stone, a flip of the $1,730 hurdle will indicate the resurgence of Ethereum buyers. After this, if ETH produces a higher high above the recent swing point at $2,019, it will invalidate the bearish thesis for Ethereum price.
In this case, ETH might continue its uptrend to revisit the $2,100-to-$2,300 area, which has historically been a high resistance zone.
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
Here are the best and worst-performing cryptocurrencies in H1 2024
A recent report by Crypto Koryo on Wednesday revealed meme coins as the top performers among cryptocurrencies so far in 2024, with several altcoins coming in behind. The worst-performing tokens are DeFi and governance tokens.
Ethereum poised to follow Nvidia's steps as Bitwise files updated S-1 draft
Ethereum (ETH) is down 3% on Wednesday following Bitwise filing an updated S-1 draft and a wider market downturn with potential Mt. Gox BTC supply flooding the market.
What to expect from altcoins as ETH ETF approval draws closer
As the crypto market continues consolidating on Wednesday, altcoins show mixed signals ahead of the spot ETH ETF launch. Many have predicted that the alt season may not occur in this cycle following the market lull. However, two key metrics suggest otherwise.
PolitiFi meme coins surge as Biden support lowers
Crypto prediction markets favor Kamala Harris over President Joe Biden as Democratic nominee in upcoming presidential elections. Meme coins based on Vice President Harris rallied amid BODEN token's 30% decline. Other tokens based on possible replacements for Biden experienced similar surges.
Bitcoin: BTC price correction could end in July, according to seasonal data
Bitcoin (BTC) price appears poised for a decline this week, influenced by slight outflows in US spot ETFs, selling activity among BTC miners, and a combined transfer of 4,690.28 BTC to centralized exchanges by the US and German governments.