In line with our yesterday’s bearish call, Ethereum has cracked the important support level of 0.002BTC as bitcoin shows strong positive signs. With the breach, Ethereum has dropped roughly 3% to trade at 0.00198BTC. It touched an intraday low of 0.00194BTC.
The pain is clearly not over for Ethereum; the momentum and the strength indicators have taken drastic cuts, and the price may see 0.0019BTC before short-sellers cover their positions.
Take a look at the latest technical considerations from the 4-h ETH-XBT price chart taken from the KRAKEN exchange.
Chart Structure – Although Ethereum touched 0.00194BTC post the sharp fall on higher volume (marked in the chart), it may still retest its recent low of 0.0019BTC. In case the bearish pressure rises, the price may plummet to 0.0018BTC.
Bollinger Bands – After failing to advance beyond the resistance posed by the 100 4-h SMA of 0.00206BTC, the cryptocurrency is now trying to take support from the lower end of the BB at 0.00196BTC.
Momentum – The Momentum is showing a current value of -0.0001, indicating a bearish influence on Ethereum.
Money Flow Index – The MFI has undergone a steep cut from yesterday’s 64.2453 to the current 42.7078.
Relative Strength Index – The latest strength reading of 42.3121 represents a clear pessimistic picture.
There is sufficient evidence pointing towards the weakness in Ethereum. Market participants should consider shorting the ETH-XBT pair on advances up to 0.00203BTC by placing a strict stop-loss just north of 0.00206BTC. The target for this short trade is 0.0019BTC.
One way the short trade can go wrong is if bitcoin bulls fail to carry the price upwards even with momentum favoring them. But, if the pair gets oversold or drops to 0.0018BTC, then market participants should aggressively build long positions for a target of 0.0019BTC with a deep stop-loss placed at 0.00185BTC.