The two largest cryptos by market capitalization continue in the red after Friday. Ether (ETH) continues its downward direction and is currently on a support zone. Will this level hold?
Ether (ETH) on a key medium
The second crypto by market capitalization closed in the red on Wednesday, after a quiet start to the week. It is currently at -4% from the opening of the month, and +29% since the start of the year. We also see that its value has been moving in a descending channel since mid-February. Then, after touching the middle line of the channel on Tuesday, ether (ETH) continued lower. Currently, this crypto is approaching the lower part of the channel, which could act as support.
In addition to this, one can also notice the presence of an “imbalance zone” close to the oblique support. Thus, we can thus consider this zone around $1530 as being a key support for ether (ETH). So we could be looking at a bounce to the middle right, or the month’s opening price at $1604. However, the breakout of the channel down will be a relevant bearish signal. In this case, ether (ETH) could experience a decline towards $1400.
What position to take?
Given the bearish wave since Friday, we will rather bet on the breakout of the downward channel. In this case, a short position on ether (ETH) would be the most suitable. For this, the area around $1565 seems like an interesting entry point. Indeed, this zone aligns with the fibonacci levels 78.6% and 61.8% of the range of the week. We could thus consider a retracement on this zone before a new wave of decline.
We could put the stop above Tuesday’s high. Indeed, we remain on the assumption that the price reached the high of the week on Tuesday. Given the current bitcoin (BTC) movement, it is highly likely that ether (ETH) will break through the slanting support of the descending channel. If the price breaks through Tuesday’s high, a retracement above $1604 can be considered.
How it works ?
Entry point: $1563
Stop: $1584
Goal: $1400
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