In the volatile world of cryptocurrencies, Ethereum (ETH) and Cardano (ADA) are among the most closely watched assets. However, recent market developments have sent both assets on a downward trajectory, raising questions about their near-term price movements.
Ethereum, in particular, is facing intense pressure after a sudden market crash, and investors are wondering if it will fall as low as $1,000. A full analysis of the topic is provided in this article by the brokers at Vestronmix.
The Market Crash and Its Immediate Impact
The recent market crash was triggered by escalating tensions between two countries, which created widespread uncertainty. As a result, many digital assets, including Ethereum and Cardano, saw significant declines in value.
Over the past 24 hours, ETH has lost 6% of its value, while Cardano (ADA) has seen a 2% drop. This sharp decline occurred shortly after the news broke, sending most tokens close to their Sunday lows.
Despite the severity of the sell-off on lower time frames, trading volumes are still relatively modest compared to the levels seen during the recovery phase yesterday. This suggests that while the news caused a temporary panic, the momentum may not be strong enough (for now) to push these assets below their recent lows.
Sentiment and Fear in the Market
Market sentiment has turned notably bearish, as reflected in the Fear and Greed Index, which currently stands at 19–indicating that investors are experiencing Extreme Fear. This sentiment is a crucial factor, as it can often drive further sell-offs or lead to price stabilization. With such a low reading, it’s clear that investor confidence has been severely impacted by the news.
Recently, crypto liquidations have surged to $136 million, with the vast majority of liquidations being long positions. $122 million of these liquidations were tied to Ethereum long positions, further exacerbating the downward pressure on ETH. Specifically, $46 million worth of Ethereum longs were liquidated within the last 24 hours, adding to the selling frenzy.
Ethereum’s Technical Outlook: Heading Toward $1,350 Support?
While the market has been in turmoil, Ethereum’s Relative Strength Index (RSI) is painting an interesting picture. The RSI is currently sitting at 24.6, signaling that Ethereum is in oversold territory.
This is significant because, historically, when ETH’s RSI has dipped into these levels, it has often marked a turning point for price action. In fact, on the last three occasions when Ethereum’s RSI reached such extremes, the price rebounded sharply and surged to the $4,000 range.
That being said, the current situation is different, as the broader macro conditions remain poor, and there’s no certainty that ETH will repeat its past recoveries. However, from a technical perspective, ETH’s price might be nearing a local bottom. The next key support level to watch for Ethereum is $1,350, which appears to be the likely target for the current price action.
Cardano’s Struggles: Will ADA Drop to $0.35?
While Ethereum is in the spotlight, Cardano (ADA) is also facing significant technical challenges. Cardano had a strong rebound a few days ago after bouncing off the $0.515 level, which was previously identified as a bearish target for the token. Despite this recovery, momentum indicators suggest that bears are still in control.
The RSI for ADA is currently showing a 23% divergence from the signal line, indicating that negative momentum is accelerating. Additionally, the MACD histogram has displayed three consecutive dark red bars, further confirming a bearish outlook for Cardano. These technical indicators suggest that the current rebound might be short-lived, and further declines are possible.
The most critical level for Cardano is the $0.50 support. If ADA breaks below this threshold, it could experience a 30% drop from its current price levels. This estimate is based on the size of the bearish pennant’s pole, one of the bearish patterns that are currently in play for ADA.
Can Ethereum and Cardano Bounce Back?
While the current outlook for both Ethereum and Cardano is bleak, it’s important to consider the broader context. The Fear and Greed Index reflects extreme pessimism, which may signal that a reversal could be near. Additionally, technical indicators for both assets are signaling that they are in oversold conditions, potentially setting the stage for a rebound.
For Ethereum, the next critical levels to watch are the $1,350 and $1,000 support levels. If Ethereum can hold above these levels, it may form a base for a potential rebound. For Cardano, the $0.50 support is the key level to monitor. A break below this level could lead to a significant downside, but a bounce could set ADA on a path to recovery.
Conclusion
The recent sell-off in Ethereum and Cardano has sent both assets spiraling lower, and the market sentiment remains deeply pessimistic. However, the technical indicators are signaling that both assets are nearing oversold conditions, potentially setting the stage for a rebound.
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