Ethereum (ETH) drops, the crypto market in bad shape?

Ethereum is following in the footsteps of bitcoin and heading towards the lower boundary of the $1440 and $1280 range. Indeed, the king of cryptos has shown no signs of a potential rebound since the drop on October 18. Chances are it will continue to relevant support. As a result, we could consider a continuation of the decline on Ethereum.

Ethereum drops, but in a range?

The price of Ethereum (ETH) is still moving in the range of $1440 and $1280. This is a channel that has formed since September 18th. And since then, we can not see any sign of breakage, neither up nor down. Most of the time, this crypto trades on the lower part of this range. On top of that, yesterday’s drop led the price of Ethereum to approach $1280. This situation is likely to get worse if bitcoin (BTC) shows no bullish signs.

If the price were to break this range down, we could consider a test of the low of September 21st. This is a key reversal level, « swing point which is around $1220. However, Ethereum’s decline towards this level could also be a manipulation of market makers. In this case, sellers should be cautious as ETH may make a quick correction towards $1220.

In such a situation, crypto traders can expect the price to reach $1440. This is the closest resistance on the upside.

However, if Ethereum closes a daily candle near $1200, the bullish scenario will be invalid. Not to mention the current lack of movement, this could amplify Ethereum’s decline. We could even envisage a fall towards supports like $1080 or $1000.

Ethereum drops
Ethereum (ETH)/Dollar (USD) – source: TradingView

Indicators in favor of the bears

If we take a look at the indicators, several of them are in favor of a drop in Ethereum. We are talking in particular about the 50-day moving average and the RSI.

Indeed, the second crypto by market capitalization is still moving below the 55-day moving average. Which means that the bears remain in control, despite the efforts of the buyers. Ethereum will continue to decline based on this indicator alone. Note that this is also a major resistance for the price. Thus, in a bullish scenario, the 50-day moving average is a major obstacle.

On top of that, the 14-day RSI has been following a bearish line since August 12th. Indeed, two peaks collided on this “trend” line. But not only that, the right also rejected the RSI during the October 17 session. We could thus envisage a continuation of the current decline on Ethereum. The next support on the RSI is around 32.31.

In sum, Ethereum is in bad shape. Other altcoins are too. This is likely to get worse if the bulls don’t act on bitcoin. It seems that “the Merge” did not really “help” ether in terms of market valuation.

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