Ethereum is the second-biggest cryptocurrency after Bitcoin, which makes it the biggest altcoin. However, despite being the biggest altcoin, its ROI has not been impressive since the turn of the year, especially in the past few days.
In the last 24 hours, Ethereum's (ETH) price has increased by 1.8% to reach $1,625. This increase follows a recent dip earlier in the week, when it briefly fell to $1,540. Zooming out a bit, the Ethereum price hasn’t changed significantly in the last 7 days but has gained a remarkable 35% YTD.
The Ethereum price has been falling since May, after the coin reached the $2,100 mark. Since then, there has been a lot of power tussling between the buyers and the sellers, as there has been a lot of low volatility and consolidation for some time. However, in late August, there was a sharp drop that sent the token crashing into the $1,600 key level. This was followed by the death cross (crossing over between the 50-day EMA and 200-day EMA), which signals a bearish trend.
The selling pressure was triggered by several fundamental events, one of which was the delay in US SEC approval of the Bitcoin ETF. Another reason for this decline is the strengthening of the US dollar. Since July, the US dollar index (DXY) has gone up by more than 5%.
Recently, Ethereum (ETH) has broken down the $1,650 key level, and it is currently trading below it in something that looks like a retest of a broken support. If this bearish momentum continues, we might see ETH make a lower low and reach the $1,400 level in no time.
4 Hour Timeframe
Looking at the 4-hour chart, we can get a better picture of the price movement. Ethereum (ETH) is currently testing a key level that was previously broken. If buyers can't manage to push the price back above the $1,620 zone, there's a possibility that ETH might drop back down to its recent low, which was around $1,530. Additionally, the Relative Strength Index (RSI) is mostly flat, hovering around the 50% mark. This suggests that there is currently a sense of uncertainty or indecision in the market.
What’s Next for ETH?
With the USD recovering and gaining strength, which has a negative correlation with the crypto market, it looks like we might see ETH crashing back in the short term. Moreover recent reports suggest that FTX is selling off recovered cryptocurrencies worth more than $3.4 billion, which might further dampen market sentiment.
If buyers are unable to regain control and push the price back above the level of $1,620 there is a possibility that ETH could experience a temporary drop to around $1,530. Looking ahead into the future there is also a potential for it to decline further to $1,400.
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This article is intended for educational purposes and is not financial advice.