The value of ether, the token that powers the ethereum community, fell to 19-thirty day period lows just in excess of $80 on Friday.
Ether’s greenback-denominated exchange rate (ETH/USD) slipped to $81.30 at 02:15 UTC – the cheapest stage because May well 2, 2017 – according to CoinDesk’s Ethereum Rate Index (EPI).
As of composing, ETH is buying and selling at $83.00, representing a 17.8 p.c drop on a 24-hour foundation. Just 3 weeks ago, it was teasing a brief-expression bullish reversal above $200.
That critical guidance (now resistance), on the other hand, was breached on Nov. 14, as bitcoin’s drop below the very important guidance of $6,000 dashed hopes of a key bullish reversal, primary to wide-primarily based possibility aversion in the cryptomarkets.
Ether selling prices have dropped shut to 60 p.c in the time because and are at this time down a staggering 94 p.c from the record high of $1,431 hit in January.
So, it is not shocking that bearish sentiment has reached extremes, as noticed in the chart below.
ETH/USD shorts and longs on Bitfinex
The ETH/USD brief positions on the cryptocurrency exchange Bitfinex rose to a record high above 340,000 shortly just before push time. Notably, shorts have risen by 183 p.c in the last 3 weeks. Meanwhile, extended positions have dropped to the cheapest because Sept. 12, as noticed in the chart above.
These serious positioning is ordinarily a sign of oversold ailments and presages market place bottoms. Even so, contacting a bullish reversal on the foundation of just record brief positions is akin to catching a slipping knife.
The outlook, hence, stays bearish until finally a far more credible evidence of trend reversal emerges.
As noticed above, ETH experienced made a compact doji candle last 7 days, implying bearish exhaustion. That candlestick pattern, on the other hand, has been invalidated with a drop to 19-months.
Moreover, ether has discovered acceptance below $102.20 (very low of the doji candle), meaning the promote-off from $200 has resumed.
The chart also reveals that 5- and 10-7 days very simple relocating averages (SMAs) are trending south.
As a end result, ETH may well extend the drop towards the next key guidance lined up at $59.00 (March 2017).
That claimed, the momentum may well weaken fairly, as the 14-7 days relative toughness index (RSI) is reporting oversold ailments for the initial time December 2016.
- ETH may well exam the very important guidance at $59.00 (March 2017) in the close to-expression.
- With oversold readings on the weekly RSI and bearish sentiment at record highs, there is constantly a possibility of a unexpected corrective rally. The outlook, on the other hand, would continue to be bearish as extended as ETH is buying and selling below the new decrease high of $128.00
- A brief-expression bullish reversal would be confirmed if and when ETH violates the new bearish decrease high pattern with a each day shut above $128.00 (Nov. 28 high).
Disclosure: The writer holds no cryptocurrency assets at the time of composing.