Ethereum (ETH) Technical Analysis: Bulls Depart from ETH, Price Stagnates Under $200

Nothing in this article is to be construed as investment advice. Neither the author nor the publication assumes any responsibility or liability for any investments, profits or losses you may incur as a result of this information.

Ethereum continues to weaken this week, down a further 32.21% against the US dollar as a mass exodus of investors, ICOs and miners crushes ETHs market demand. Ethereum shorts on the futures market have spiked significantly over the last week, too, as derivative traders forecast a continued slide to the asset’s value.

A constant reshuffling of priorities and lack of communication with the wider community in the last month has created a great deal of uncertainty over which direction the project is actually taking, leaving many investors seeking more secure assets elsewhere.

On August 31st, Core Developers were finally able to reach a consensus and commit to EIP 1234, which will delay the difficulty bomb by 12 months and reduce ETH block rewards from 3ETH to 2ETH. The new proposed version of Casper (V2), Ethereum’s new Proof-of-Stake algorithm change, has been decidedly postponed until sometime around 2019-2021 according to Mango Research. These decisions have not been unanimous and there are still many who opposed the postponement of Casper and the issuance reduction as a threat to both community confidence and network security.

Ethereum is in a hole right now but can bullish sentiment return to the asset as it approaches the Constantinople hard fork next month, or is the damage already done? Let’s see.

Diving into the 1D ETH/USD chart we can see that Ethereum has been steadily declining since May, showing little sign of recovering back to its earlier highs. In the last 48 hrs, increased selling pressure forced the asset through the $200 support region, driving ETH towards the lowest price points we’ve seen since September 2017.

Right now ETH is resting along the top level of a new support region between $197 and $170, but with so many Ethereum short positions piling on top of the asset it is likely that we’ll see it continue to slide - unless of course, bullish whales step in to squeeze these out.

Looking at the indicators over a 2hr candle range we can see a number of bearish signals that support this idea:

• MACD: The 12MA has bullishly crossed over the 26MA but this is just a reflection of the recent correction now that ETH is at its new support. Both moving averages are still way below the signal line, and the histogram is showing a decrease in momentum.
• CMF: Has crossed above the signal line but is already starting to curve back towards it as selling pressure picks back up again.
• RSI: The indicator line is starting to diverge bearishly back towards the oversold line, showing a truer representation of the current price action.
• Ichimoku Indicator: A resisting Kumo is stretching out in front of the price action accompanied by a bearish T/K crossing.

Ethereum (ETH) Price Targets

All price targets are set from the current support at $197.

• Price Target 1: A bearish continuation to the lower support level at $170. (-13.71%)
• Price Target 2: If sentiment continues to worsen in the current trend then it is likely that we’ll see the asset find the lower support region at $137 before correcting. (-30.46%)