- Ethereum prices dropped below $2000 in the latest selloff and printed 20% losses since the past week
- A technical setup combo hints at a further 15% decline for the ETH/USD pair
JAIPUR (Coinchapter.com) — Ethereum’s native cryptocurrency token, Ether (ETH), fell prey to another market-wide selloff. It slipped below the $2,000 and $1,900 price levels, sparking renewed bearish sentiment. A combination of technical setups points to further losses ahead for the second-largest cryptocurrency.
ETH’s recent trend (since the May 19 crash) has followed an inverse cup and handle pattern. A slew of failed recovery rallies (since the $1720 support formation on May 23) and the price drop since the last 2 days confirmed the pattern’s formation.
But besides the bearish technical setup, the ETH/USD pair is also trending within a descending channel formation. Ethereum’s native cryptocurrency has grazed the lower bound on quite a few occasions. Dropping to $1685, $1720, and $1788 price levels. Similar to these previous instances of retracements, another round of correction awaits ETH. Especially since the selling pressure continues unabated.
In the said scenario, the ETHUSD pair again retests the lower bound of the descending channel pattern. The same would cause prices to crash another 15% from current levels to low $1600 levels. Thereby creating a new layer of support for the number 2 cryptocurrency.
“$ETH may be threatening to lose its 2021 Higher Low (black)… But #ETH is still maintaining its blue wedging structure ETH is currently in a confluent area of support…” said Twitter-based cryptocurrency trader & analyst Rekt Capital.
Crypto analyst and trader Josh Rager said that such a drop to $1,600 and beyond would serve as an opportunity to enter new long positions.
“One part of a downtrend market is making a plan for potential buy areas $ETH — watching higher time frames if this weekly level breaks, would be looking at $1,600s to buy then $1,400. Check out charts and make a plan for assets that you plan to potentially accumulate.”, he noted in one of his latest tweets.
Mr. Rager is not the only trader to call for a $1400 local bottom in the latest ETH selloff. Anonymous analyst, DonAlt said:
“$ETH Right at weekly support but making lower lows and generally looking heavy Next support is the previous ATH at $1400.”
Why Ethereum Price Dropped?
Even with EIP-1559’s bullish backdrop, ETH traders/investors rushed to offload their holdings after assessing the latest U.S. inflation data.
U.S. consumer price index (CPI) inched up 0.9% last month to 5.4% year-over-year. It marked the rise of consumer inflation to its highest level in the previous 30 years. The U.S. dollar gained strength as the DXY index printed a giant green candle from 92 to 92.88 points.
Investors rushed to dump their crypto holdings in exchange for the greenback in anticipation of the U.S. Federal Reserve’s move to put an end to its U.S. economy-supporting stance.
But despite the current ultra-bearish market scenario, ETH could still rally back to the $3000 price level. A crypto exchange executive asserted. The said price level still is a crucial resistance level that needs surmounting for more significant upsides.