Ethereum (ETH) looks extremely bearish against the US Dollar (USD) but it looks even more bearish against Bitcoin (BTC). This is because for the past few weeks, ETH/BTC has been incredibly close to breaking a key support. This support has held for a long time and if it is broken this time, it will have dire consequences. First of all, the support that the price breaks will become a strong resistance which means two things explicitly and implicitly. Explicitly it means that we will have no altcoin season in a long time. Implicitly it means that if there is no altcoin season for a long time it means that the next bullish cycle hasn't begun yet.
Ethereum (ETH) has long been the leader of altcoins. If it falls, we will see the altcoin market take heavy fire and the market will experience maximum pain. So far, ETH/USD seems to be following in the footsteps of Bitcoin (BTC) replicating its every move but most of the time this is not the case. Usually, we see Ethereum (ETH) rise higher when Bitcoin (BTC) rises and fall lower when Bitcoin (BTC) falls. This means that if the sideways movement in ETH/BTC ends, we will see it end this pace conformity with Bitcoin (BTC). While situation in the global currency markets worsen, some investors are looking at Bitcoin (BTC) as a hedge but altcoins do not fit into this use case. Ethereum (ETH) is a smart contracts platform not a coin that is meant to be the one global digital currency. Moreover, Ethereum (ETH) does not have the same authenticity and loyal following as Bitcoin (BTC). A lot of people believe that Bitcoin (BTC) is quite decentralized free of external influence, but the same cannot be said of Ethereum (ETH). Unlike Bitcoin (BTC), its founders are known and its history of dealing with hacks and internal conflicts is also known.
If we take a look at the sentiment, we can see that the bullish euphoria remains high and investors still expect a rally to a new all-time high. Last week's ETH/USD close as well as the recent daily close for the past few days is a clear indicator that the market makers are hell bent on milking every last bull for their final drop of optimism. The way the daily candle closed yesterday shows that the market makers made the retail traders believe the price could rally past $300. When everyone went long, they pulled the plugs. Those that were short with their stops around $300 were shaken out at the same time with a doubled edged move. As long as the bear market remains close to the beginning of a new downtrend, we will continue to see such overzealous traders being shaken out and preyed on by the market makers.