Bottom line: Ethereum long term structure continues to remain bullish against 89.50 lows. Over the short term though, the crypto might be preparing to drop towards 250.00 mark. Bears might want to remain in control from here on.
Fundamental Outlook:
USDCHF had pushed close to 0.9150 mark before pulling back yesterday. The exchange rate might be set to gain further as US Dollar continued its rally against EURO, GBP and others majors. The US Dollar Index (DXY) also managed to register above 93.00 mark.
The US and European indices tumbled during the New York session and Asian Markets might follow suit. Risk aversion might gain further traction over the next few weeks as geopolitical tensions between US and China keeps rising, the recent being China’s Chip Policy.
The upcoming US Presidential Election might add further to the volatility as Biden continues to lead Trump, marginally though. Safe haven US Dollar might be the only beneficiary if risk assets continue selloff. Dow Jones closed -2.42%, SPX500 at -3.5%, DAX down -1.4% and FTSE was down -2.60%.
Technical Analysis:
Ethereum bulls managed to push through 488.00 levels early this week, only to reverse sharply. The crypto has registered lows at 371.00 since then and might have carved a meaningful top already. Immediate support around 370.00/371.00 has been already taken out.
Ethereum bulls have managed to produce a religious uptrend since its lows around 89.50 levels in March 2020. It has carved a meaningful bullish boundary between 89.50 and 488.00 levels respectively. The rally seems to be an impulse wave, which should be followed by a corrective drop.
Furthermore, as Ethereum rose to new highs around 488.00 early this week, the RSI on daily chart was reflecting strong bearish divergence. The reversal to 371.00 lows might have confirmed that a meaningful corrective drop could be on its way.
Also note that fibonacci 0.618 retracement of the entire rally between 89.50 and 488.00 is seen through 245.00/250.00 levels. High probability remains for a bullish bounce, if prices manage to reach there. Most traders might be preparing to sell close to resistance around 440.00.
Prepared by
Harsh Japee, Technical Analyst.
Ethereum Chart
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