Ethereum impressive move from last week’s lows crossed the $200 hurdle. This may be emblematic of improving technical conditions for the cryptocurrency. However, it failed to break above $205 thus allowing the sellers an easy-takeover. Failed support has Ethereum retreating below $200. It has started a downside correction. Ethereum price topped near the $204 level and failed to gain strength above the $202 resistance level.
The 50 Simple Moving Average (SMA) one-hour is the most probable short-term support currently at $197.23.The next tentative support is $195 if this level fails to hold, while extended declines will find cushioning at the 38.2% Fib retracement level with the swing low of $173.03 around $185 area and last swing high from $204.49. In case $180 fails to hold, last week’s low at $173.03 will offer the much-needed support.
The analysis is backing the prevailing bear pressure. The Relative Strength Index (RSI) is heading down from the overbought region. The gradual slope depicts that Ethereum bears are slowly gaining footing against the bulls. With the RSI heading south, the prevailing trend is strongly bearish. In the mean-time, the remaining bullish indicator is that the 50 SMA is widening the gap above the longer-term 100 SMA.
Although it does seem in the short-term as though ETH may incur some further bullishness, it is essential to note that its mid and long-term price action does appear to remain somewhat bearish. A failure to follow through and extend the upward momentum could lead to further losses.
The price is currently trading below $195 and is trading near the $190 support area. Ethereum price is preparing for the next key break versus the US Dollar, as Bitcoin corrects gains. If ETH breaks the $190 support, its price could decline heavily.
In the near term, the Ethereum price is possibly approaching the next break either above $200 or below $190. There are chances of a strong downward move in the coming sessions if the price continues to struggle near the $200 and $202 resistance levels.
For the uninitiated, Ethereum (ETH), conceptualized by Vitalik Buterin in 2013, is a smart contract platform that enables developers to build decentralized applications (dapps). ETH is its native currency.
According to the creator Vitalik Buterin, the increased cost of transacting on the Ethereum blockchain is hurting the software’s adoption. He suggested that projects considering whether to build on the technology will likely be pushed out as the blockchain is overloaded with transactions. His comments indicate that scalability is still an issue, while the pressure of high transaction costs and the transaction space struggle is keeping new partners from joining the network.