Your favorite crypto news blog

Ethereum Slides 14% In 24 Hours, Bear Div Hints At Deeper Drop Ahead

Altcoins 2020/09/02 15:10 by Tony Spilotro

Few cryptocurrencies have had as explosive growth in 2020 as Ethereum has. The top-ranked altcoin led the market into a recovery in early 2020, and after a revisit to an accumulation range, the DeFi trend helped Etheruem rocket out of lows.

However, today was the first sign that Ethereum’s momentum may be waning, as the second-largest crypto by market cap tanked by over 14% in the last 24 hours. Losses have since cooled off to just roughly 7%, but a bearish divergence forming may indicate that there’s more downside ahead.

Ethereum Drops 14%: Bulls Hang Onto Half Of Gains, But Are At Risk Of Losing It All

Overnight last night and into the morning before today’s regular market opening, the always-on crypto market began to correct. Leading the selloff was Bitcoin and Ethereum, each dropping in a violent move.

Ethereum specifically dropped over 14% from yesterday’s high to today’s low. After setting a new 2020 high yesterday at $490, today’s fall left a wick behind down to $420 per ETH token on some exchanges.

The top altcoin is trading back at roughly $440 at the time of this writing, but a massive daily bearish divergence has formed on the Relative Strength Index, which suggests the correction has only just started.

ethereum ethusd td9

ETHUSD Daily Relative Strength Index Bearish Divergence | Source: TradingView

Top Altcoin Could See Much Deeper Correction, According To Overheated Technical Indicators

According to the Relative Strength Index on daily ETHUSD charts, Ethereum may have a lot more to fall. Ethereum has made a much higher high against the dollar, but the indicator continues to make lower highs. This behavior is called a bearish divergence, and it often forms ahead of a reversal.

Divergences are among the most reliable reversal signals, but they don’t tell you when these reversals will happen. As was seen yesterday, a new high was set before any bearish pressure took over.

But once bears took control, things quickly got out of hand and the correction became violent.

In addition to the divergence on daily timeframes, ETHUSD also triggered a weekly TD 9 sell setup on the TD Sequential indicator with Sunday night’s new weekly open.

ethereum ethusd td9

ETHUSD Weekly TD Sequential and Support Levels | Source: TradingView

The chart above shows just how reliable each of these 9 signals has been in the past, calling most of Etheruem’s most pivotal top formations. Coinciding with a bearish divergence makes the signal even more damning for the smart contract focused cryptocurrency.

If the fall does keep going, Ethereum still has support to test at $390 before risking a retest of past highs as resistance turned support. Below $390, targets could reach as low as $300, $275, and $210 approximately.

0 Like(s)

You should also read...

Altcoins 30/04/20 06:48 by Aayush Jindal
Ethereum Rally Seems Unstoppable: Here’s Why It Could Test $250
Ethereum is up more than 12% and it broke the $220 resistance against the US Dollar. ETH price is likely to continue higher and it could even test the $240 and $250 levels. Ethereum is surging and it...
Read More
Altcoins 14/08/20 22:00 by Tony Spilotro
Indicator Shows XRP Has Most Explosive Momentum Since 2017 Bubble
XRP’s recent rally has taken a pause, leaving crypto investors scratching their heads wondering which way the altcoin will turn next. Will it fall deeper into the throes of the bear market, or w...
Read More
Altcoins 25/08/20 20:40 by Tony Spilotro
Ethereum Plunges 10%, Bearish Signal Confirms With Close Below $390
Ethereum has been one of the best-performing assets in 2020, bar none. It beat Bitcoin, gold, stocks, and other assets in the best return on investment, had the $1,200 stimulus check be entirely inves...
Read More
Altcoins 03/09/20 21:30 by Tony Spilotro
XRP Plunges 20% From Highs: Here’s Why More Downside Is Expected
Along with Bitcoin, Ethereum, and the rest of the crypto market, XRP has taken a significant hit during the last 48 hours of carnage. Ripple has since plunged by over 20% from its recent peak, but a b...
Read More
Altcoins 04/02/21 14:33 by Yashu Gola
Ethereum Triangle Breakout Shifts Price Target to Over $2,000
Ethereum achieved a new milestone this Thursday as its price almost touched $1,700 for the first time in history. The ETH/USD exchange rate hit $1,699 on the Coinbase exchange after rallying 29.79 per...
Read More