Ethereum (ETH) is on track for a major decline this week as the bulls failed to defend the price above $90. Earlier this week, Ethereum (ETH) had entered an ascending channel which raised the hopes of buyers but it was short lived as the price broke below that channel soon as Bitcoin (BTC) started to fall. The big picture is still pretty clear and Ethereum (ETH) certainly has completed its correction for the most part. It is not very likely for the price to drop significantly from current levels but a fall to $80 seems inevitable. ETH/USD has now reached the extreme end of the falling wedge it is trading in and it is due for a major reversal in the weeks ahead.
However, the whales are likely to drag the price lower one last time this week so they can trigger some panic selling in order to lowball. As the price falls, so does the number of weak hands. The people trading Ethereum (ETH) at these levels are not the ones to be easily moved by market sentiment or emotions. They know what they are doing and they understand that the price is going to drop to $80 or lower before a reversal can be expected. This is why they are not going to step in to catch a falling knife and thus the bears will have their way with Ethereum (ETH) one last time. That being said, any overzealous bears are more likely to become cannon fodder themselves if they push it too far.
In one of our previous analyses, we explained the analogy of a coil spring in financial markets. If you push the price of an asset down in one go without allowing for small pullbacks, it is very likely that soon you will tire off all the pushing and the coil spring will hit you in the face. That being said, if there is a large number of people pushing that coil and you are resisting that push, you are likely to be nailed to the ground along with that coil. So, it is all about understanding which way the market is moving but you have to be wary of the big picture. Just like in this case, Ethereum (ETH) has one final wave to go down but if you are trading it to the downside, you have to be very careful as the trend is about to reverse.
Just like Bitcoin (BTC), Ethereum (ETH) moved up last week leaving a gap to be filled later. While Bitcoin (BTC) left that gap trading against the US Dollar (USD), Ethereum (ETH) left that gap trading against Bitcoin (BTC). If we look at the daily chart for ETH/BTC, we can see that the price hit 0.024 BTC before its big rally in November 2017. However, Ethereum (ETH) conveniently left a gap when it fell to test this level last week. This gap is not going to be left there, it is going to get tested, and soon. ETH/BTC is up for the day but all of that is going to change very soon when the price falls against Bitcoin (BTC) to fill that gap in the next few days.