These 5 Simple Factors Behind Ethereum’s Rally is”Running on Fumes”
To justify a bearish sentiment, one analyst recently pointed to five factors that he believes could mean drawback is imminent for the cryptocurrency.
While speaking about Ethereum’s near-term outlook, one analyst pointed to five simple aspects that indicate it may soon find a notable dip.
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Published at Tue, 29 Sep 2020 20:00:18 +0000
“I just can’t seem to shake the feeling that ETH was running on fumes lately. Extremely accelerated DeFi coin market cycles. Kucoin hack. EMN hack. A great deal of liquidity below. Stairstepping upwards PA (typically ends in elevator ). Yet, it holds/randomly rallies. Shortly I think.”
Chart via TradingView.
This could indicate that further downside is imminent for the cryptocurrency.
Ethereum is currently attempting to rebound after plunging to lows of $350 earlier today. Even though the initial reaction to this level was bullish, ETH has been unable to maintain its upwards momentum.
Charts from TradingView.
At the time of writing, Ethereum is trading at its current price of $355. This marks a small decline from daily highs of $367, but a bounce from lows of $350.
As such, the token may now be positioned to see further downside in the near-term. This may depend somewhat on Bitcoin, as it’s been firmly directing ETH and other major altcoins.
The confluence of all these factors does indicate that the DeFi hype cycle which helped drive Ethereum to highs of $490 is rapidly coming to an end.
The rebound from these lows at first was intense but has since lost its momentum. This could mean that further downside is imminent in the near-term.
This was a historically important support level, so a break below this could ignite an accelerated decline down towards the support between $315 and $325.
BTC is currently pushing up against its $11,000 resistance, which has been shown to be insurmountable.