Ethereum (ETH) plunged deep into the red today as the price fell 11% in a matter of hours. The whole market nosedived as Bitcoin (BTC) fell back below $7,000 but Ethereum (ETH)’s reaction was one of the most aggressive as shown by the ETH/USD
daily chart above. This can be attributed to the uncertainty and infighting surrounding Ethereum (ETH). The cryptocurrency has recently been the subject of debate among miners and developers as Ethereum (ETH) continues to ignore the demands of miners as it prepares to switch to Proof of Stake (PoS) from Proof of Work (PoW). However, before making that transition Ethereum (ETH) has already alienated the mining community by delaying the mining difficulty removal.
This means fewer rewards for miners which translate into a lack of interest for Ethereum (ETH) mining. When Ethereum (ETH) forked off the original chain, now run by Ethereum Classic (ETC), it received a big boost compared to Ethereum Classic (ETC) because it had a large group of miners and developers switch to the newly forked cryptocurrency, Ethereum (ETH) whereas Ethereum Classic (ETC) was left to die. However, given the fact that Ethereum (ETH) violated an important principle of immutability by forking off to support the DAO bailout, it resulted in weak foundations. So, soon afterwards the need for conserving original principles and values kept fading away to a point of factions being formed inside the Ethereum (ETH) community once again.
The aggressive reaction of the price compared to the rest of the market seems to be a reflection of that. Ethereum (ETH) has held its $250 support strongly and has rejected any sell pressure to breach this level until now. However, the wave trend analysis suggests that there is still room for further downside. RSI conditions also allow further downside in case the market takes another hit. However, the $250 support for Ethereum (ETH) has proven to be a strong one and as long as nothing out of the ordinary happens, it is expected to respect that support.
As mentioned in one of our previous analyses before, Ethereum (ETH) was due for a final wave down against Bitcoin (BTC). The above chart for ETH/BTC
on the daily time frame shows that we might have just completed that last wave down. Ethereum (ETH) is currently trading in a falling wedge against Bitcoin (BTC) and has now almost reached a point of break out.
If the price defends the lower limit of the falling wedge against Bitcoin (BTC), the next wave up will be expected to break the falling wedge and begin a new trend against Bitcoin (BTC). Wave trend analysis as well as the RSI both lay in oversold territory against Bitcoin (BTC). There doesn’t appear to be room for further downside against Bitcoin (BTC) and once the dust settles, most cryptocurrencies including Ethereum (ETH) are expecting to kick off the altcoin rally beginning their new cycles against Bitcoin (BTC) before the end of the year.