Ethereum (ETH) ran into a critical resistance around $216.67 and faced a strong rejection. The price is currently trading well below that mark and is due for further downside as ETH/USD has also run into the top of its ascending channel. This ascending channel that the price has been trading in since December, 2018 was broken to the upside in January, 2019 and the price tested it as support before falling back inside it. Since then, this channel has seen the price climb within a tight range. As the price has now run into a strong resistance, we could expect it to decline in the days and weeks ahead to the bottom of the channel. RSI on the daily time frame also shows a strong bearish divergence and the price risks a fall to the 38.2% Fibonacci retracement level.
For the past few weeks, Ethereum (ETH) like most altcoins has been lagging behind while Bitcoin (BTC) made big moves. This has led to ETH/BTC lose substantially in the recent past and Ethereum (ETH) has already broken below key support levels against Bitcoin (BTC). The next few months are going to be important to see where Ethereum (ETH) goes against Bitcoin (BTC) during the inevitable downtrend. What we have seen so far is that Ethereum (ETH) lags behind during a rally and when BTC/USD starts to fall, ETH/USD falls even harder. This is because we are still in a bear market and the big moves we see are primarily due to manipulation in Bitcoin (BTC). There is still a lack of genuine buying interest in the market. Even professional cryptocurrency traders that are bullish admit that this is just institutions pumping the price.
One way to look at this would be that they want to accumulate before the next bull run. This is what most of the traders who are bullish think but I do not agree with that. The institutional traders do not FOMO into a market. What they do is they make the retail traders FOMO in when they see an opportunity so they can trap them in and then dump on them. We have seen this happen throughout the bear market and it seemed that now was a good time to do it again. As we can see, it has had the desired effect and everybody is bullish all of a sudden expecting the same result: a rocket to the moon.
The daily chart for ETHUSDShorts shows that the bears have been terribly scared by the recent moves in Ethereum (ETH). The number of margined shorts against ETH/USD has now declined to a critical trend line support after days of massive liquidations. The past few days have been extremely hard on the bears and maybe there is still more hurt to follow. However, it is quite clear what the game plan is. The whales are just trying to delay the inevitable but it will happen sooner or later. This is not the end of the bear market and as we will see in the weeks and months ahead, ETH/USD has yet to capitulate and bottom most likely by the end of the year.