Ethereum (ETH) Might Take A While To Drop Below $160

Ethereum (ETH) Might Take A While To Drop Below $160

Ethereum (ETH) has faced a strong rejection at a critical trend line resistance which means the price is highly likely to decline in the weeks ahead. However, now that it has declined so sharply in such a short time, we expect the price to take a while to consolidate or rally before it can fall further. The 4H chart for ETH/USD shows that the price has ample room to rally considering that its Stochastic RSI is oversold short term and the RSI has found a trend line support that could see the price rally back towards the top of the symmetrical triangle in the days ahead. Ethereum (ETH) has seen a lot of positive developments recently which are likely to reflect in its price in the near future. The sentiment remains bullish despite the recent setback and the bulls could push the price back above $180.

The trading volume for ETH/USD continues to decline but investors are eager to accumulate for long term as the price is down more than 85% from its all-time high. For value investors that buy assets that are oversold, Ethereum (ETH) is one of them at the moment. That is not to say though that the price could not decline further. In fact, as mentioned in our previous analyses, we still expect Ethereum (ETH) to decline to $60 or lower in the weeks and months ahead. However, investors who are in it for the long term need to realize that this is still a good price to be accumulating for long term. It is never a good idea to go all in or all out in one go if you believe in an asset long term. The best course of action would be to dollar cost average different entries whether you are looking to long or short.

The 4H chart for ETH/BTC shows the price has now declined below the trend line support. The rising wedge has been broken to the downside and the price will now have to test the previous support line as resistance. It would be interesting to see how it plays out. If the price gets rejected at the trend line support turned resistance, we could expect further downside in the weeks ahead and traders would be better off entering short positions around that point. Please be advised though that shorting Ethereum (ETH) at this point is not much different than longing it around $15,000. This is why it is important to have controls in place to better manage risk.

Ethereum (ETH) has been through a lot of criticism lately. Regulatory bodies like the SEC have been cracking down on ICOs conducted on the Ethereum blockchain. Furthermore, the delay in PoS (Proof of Stake) transition has also been a confidence breaker for investors. The situation with PoS is not likely to get resolved soon which is why the price could see further decline. Investors may expect to see some big news or announcements that could trigger that fall. That being said, this is the time to be accumulating for long term and not selling if you believe in the long term potential of Ethereum (ETH).

Investment Disclaimer
Related Topics: