Ethereum (ETH) Risks A Sharp Decline To 200 Day Moving Average

Ethereum (ETH) is still in trouble and risks further downside as the price struggles to break above $200 once again. The daily chart for ETH/USD shows that the price now faces a rejection at the 100-day EMA to break higher from current levels. If it continues to close below the 100-day EMA, we would be looking at a decline towards the 200-day moving average in the near future which would also coincide with a retest of the 61.8% fib level. This is something a lot of retail traders would easily make their peace with even under the bullish case. It is important to note though that the price could still crash straight below the 200-day moving average in case of an aggressive slump in the stock market. 

At this point, it is a good idea to start looking at Bitcoin (BTC) and Ethereum (ETH) in different ways. There are many people in this market that see Bitcoin (BTC) as digital gold but they don’t see Ethereum (ETH) as digital silver. That is a big deal and it matters a lot in times like these when we could be looking at a potential recession in the making. The Dow Jones Industrial Average (DJI) just had its single biggest one-day drop in history. This could be the beginning of something bigger and during such times, investors would be most eager to pull their capital out of riskier investments first. Ethereum (ETH) and other altcoins continue to be very risky investments. 

The weekly chart for ETH/BTC shows that if the pair declines lower from here, we could be looking at one of the most brutal declines in the altcoin market in the history of cryptocurrencies. This is a key market structure that ETH/BTC has tested now. If it faces a rejection and falls lower, this would be game over for altcoin. So, it all comes down to two possibilities here and at this point you have to make that decision. Either you think cryptocurrencies will do well in a crisis or they will do badly in a crisis. 

Recent events have made it clear that they will not do well in a crisis. Moreover, cryptocurrencies like Ethereum (ETH) would be at an increased risk. So, if this trend reverses, we could be looking at a devastating decline in the altcoin market. The dominance trend for altcoins would reverse and we would see a return to pre-2016 levels not just in dominance but most likely in prices as well. As hard as it may be to believe that, Ethereum (ETH) is down 86% from its all-time high and we are looking at the beginning of another major downtrend.