Published
4 years ago on
January 08, 2020
Ethereum (ETH) dominance has continued to decline but that’s nothing surprising. We have seen a strong decline below the key 8.56% support and Ethereum dominance (ETH.D) is now in a descending triangle. There is a very high probability that this triangle will break to the downside in the near future. Ethereum dominance (ETH.D) declined first because of Bitcoin (BTC) pumping higher relative to other altcoins, now in the near future it is expected to decline further because of Ethereum (ETH) falling harder compared to Bitcoin (BTC). This is a bearish development for the entire cryptocurrency market and it indicates what is truly going on in this market.
For a while now we have been talking about institutional exit out of the market. The decline towards $100 in ETH/USD seems highly probable and most responsible traders are aware of this. Any move to the upside whether in Bitcoin (BTC) or ETH/USD is of little consequence if there is no sustained rally. We have seen plenty of failed pumps in the past and as we see now in the case of Ethereum (ETH) this one appears to be one of such misleading pumps. As previously discussed, there is a lot of optimism around Bitcoin’s next halving and the big players in this market would definitely want to capitalize on that greed and blind optimism. Everyone is so sure that the price will rally hard before the upcoming halving. Such wishful thinking is exactly what the big players need right now so they can exit the market and leave retail traders holding the bags.
The daily chart for ETH/USD shows what the cryptocurrency stands to lose during the next downtrend. There is no denying that Ethereum (ETH) has already lost much of its value, but it has yet to decline further as long as the price remains below the $153.12 level. We can spot a clear downtrend on the RSI with the Stoch now in overbought territory.
Ethereum (ETH) and other altcoins have yet to see maximum pain. If the price begins a downtrend from here, we can expect it to take out the previous low at $80 and decline lower. It could find support around $56.34 in that case. If it declines even lower, then we can expect it to hit a single digit price. It is almost unbelievable that Ethereum (ETH) was trading north of $1,400 in 2018. The bubble has yet to fully burst. It is still possible that ETH/USD may reach another all-time high but it is going to take a lot longer than before.
Investment Disclaimer
