Ethereum Dragged Lower By Bitcoin!
Ethereum is trading lower at 2,079 level versus 2,280 yesterday’s high. The crypto dropped again erasing the latest gains. The bias is bearish after failing to take out a strong resistance area.
Technically, Ethereum was somehow expected to decline in the short term after reaching a major obstacle. ETH/USD may drop further and reach new lows as long as Bitcoin will resume its corrective phase.
ETH/USD Trading In the Red!
As you already know, ETH/USD registered a false breakout above the up channel’s upside line, so the decline is natural. It has reached also the weekly R1 (2,543) but it has failed to close above it signaling selling pressure.
Now is traded right above 2,040 static support after retesting the weekly pivot. 2,000 psychological level is seen as strong support. Personally, I believe that only a valid breakdown below the weekly S1 (1,946) and a new lower low could really announce a deeper drop towards the red uptrend line, the up channel’s support.
ETH/USD is trapped between the WL1 and WL2. A minor down channel is seen as a continuation pattern.
Dropping and stabilizing below S1 (1,946) signals a deeper decline at least until the uptrend line.
On the other hand, the current decline could be only a temporary one. False breakdown through 2,040 and 2,000 or any reversal pattern printed on these levels could bring a new upside momentum.
Personally, I believe that we’ll have a great buying opportunity if the rate registers a valid breakout above the second warning line (WL2).
The material has been provided by InstaForex Company – www.instaforex.com