Ethereum has dropped 1.5 percent to 0.00197BTC, in line with our bearish expectations. We iterated our short view in the previous technical analysis titled Bitcoin-fueled bounce fades away. The price action in the past 24 hours has been strongly bearish and threatens a further 4% drop in the pair.
Below is a brief on the latest technicals which reinforce my bearish stance. We have used the 4-h ETH-XBT price chart from KRAKEN.
Chart Structure – The underlying weakness in ETH-XBT forced the pair below the 20 4-h SMA (we discussed this possibility in the previous price analysis). The bulls did attempt to reverse the losses but failed miserably as the bears used the breached moving average as an offloading level. The pair has since then given two consecutive strong bearish candles (marked in the price chart above) and now lingers near the lows. The target on the downside has been marked as 0.0019BTC.
Momentum – The Momentum indicator is being suppressed below the 0-level as bears up their game at the end of the year. The latest value is flat-to-negative at -0.0001.
Money Flow Index – The MFI is trying to gain some ground, and has succeeded a bit as the value has jumped from near 20 to 45.1380.
Relative Strength Index – The weakness we are talking about is also indicated by the current RSI reading of 45.9405.
Ethereum remains a good, safe short with only a small possibility of an upside surprise. The only thing that can stem the decline in the pair is the lower range of the BB, which is currently very close to the current level.
I am expecting sellers to end this year on a high note. The risk-reward ratio of the short trade should be at least 1:2. Expect the target to be met in the next couple of sessions.