Ethereum (ETH) has lost nearly all the momentum it had incurred over the past week, with its recent rally to highs of $148 being met with insurmountable resistance that has since forced it into a firm downtrend.
Analysts are now widely noting that Ethereum may be bound to see significantly further downside in the near-term, with its losses potentially being as high as 35% in the coming days and weeks
Ethereum Continues Moving Lower After Losing Position Within $140 Region
After breaching $140 earlier this week, this level appeared to have become a strong level of support. Unfortunately for buyers, Bitcoin’s recent break below $8,000 led ETH to concurrently drop below this level, which appears to have opened the gates for further losses.
In the near-term, it does appear that Ethereum and other major altcoins are moving in tandem with Bitcoin, so how BTC responds to the intense selling pressure it is currently facing could provide valuable insights into where altcoins like ETH are heading next.
Calmly, a cryptocurrency analyst on Twitter, noted in a recent tweet that he believes ETH’s break below its key support will lead it to incur a selloff against BTC that could be as large as 25%.
— Calmly | full-time trader (@im_calmly) January 8, 2020
If this drop does occur, it will lead Ethereum’s price against BTC to the lowest levels seen in over a year.
Could This Factor Be Hampering ETH’s Growth?
Ethereum has been caught beneath a multi-year descending resistance line ever since its crash in early 2018. This resistance has led to numerous strong rejections and appears to be a continued source of bearishness for the cryptocurrency.
“#ETHEREUM | $ETH Another day, another rejection. Didn’t mange to short it as my bids were on and above yellow diagonal resistance – price was dumped just before it. Daily look awful, hoping for a good high entry towards main target = COME TO DADDY,” Teddy, an extremely popular cryptocurrency analyst, explained in a recent tweet.
Another day, another rejection 🐍
Didn't mange to short it as my bids were on and above yellow diagonal resistance – price was dumped just before it.
Daily look awful, hoping for a good high entry towards main target = COME TO DADDY 🏁 pic.twitter.com/UknqRAdxek
— TEDDY ⛓️💡 (@teddycleps) January 8, 2020
If Ethereum hits the target Teddy lists above, it will mark a massive 35% decline against its Bitcoin trading pair.
Bitcoin will likely continue to be a guiding force for ETH and the aggregated crypto markets, as a further decline could spark a sharp selloff amongst altcoins.
Featured image from Shutterstock.