Ether Price Analysis: Untested Support Leaves Shaky Foundation During Drop
Much like the rest of the crypto market, ether has found itself devalued by more than 90% since its all-time high of $1,400 back in December of 2017. And now, almost a year later, ether sits just above $100 on what appears to be shaky ground during its latest round of selling over the last few weeks:
Figure 1: ETH-USD, Daily Candles, Rapid Descent
Similar to bitcoin’s movement discussed in yesterday’s article, ETH-USD experienced a parabolic growth profile during its bull run. One consequence of a parabolic bull run, however, is the lack of firmly established support on the way — which, unfortunately for ether, means no firmly established support to cushion its fall on the way down. In approximately 3 weeks’ time, ether has lost almost 60% of its value.
Figure 1 shows the levels of support that have gone untested and the levels of support we have already blown right through. And, depending on whether or not we can hold current support levels, ether may be in for further lows.
Figure 2: ETH-USD, 4-Hour Candles, Lack of Retracement
The entire move downward over the last few weeks has been so violent, the market has seen little to no relief or rally during the whole 55% drop. And now, the market is consolidating in what looks like a bear pennant at the bottom of its already massive fall. If this current support level doesn’t hold, we can expect a test of the $80 region, as this is our next level of untested support:
Figure 3: ETH-USD, Daily Candles, Untested Support Levels
Unfortunately, if we manage to end up testing the $80 zone and that support doesn’t hold, we can expect another staggering drop to the $50 region. Granted, this is all up in the air at the moment because we are currently holding support at $100. However, it’s good to anticipate what’s ahead of us if ether can’t manage to hold itself up here.
If ether ends up testing the $80 region, that would be a staggering 95% devaluation from its all-time high of $1,400.
Summary
- Ether has followed the rest of the crypto market as bitcoin tumbles down further and further. To date, ether is down 90% since reaching its all time high back in December of 2017.
- Because of the parabolic rise last year, ether never managed to establish firm supports. Unfortunately, this means there is nothing to cushion the market as it moves lower and lower.
- We are currently holding support at $100 but if we can’t hold this level, we can expect to see a test of the $80 region, as this represents the next level of untested support.
Trading and investing in digital assets like bitcoin and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.
This article originally appeared on Bitcoin Magazine.
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