As with stock markets, cryptocurrency had a rough day yesterday. Ethereum lost approximately 9% of its value and the bears drove the price towards the support level at $2,800.
The Daily Chart
Ethereum entered a correction phase on a daily basis after failing to break through the Fibonacci Retracement barrier at 0.618. The bullish pattern it is currently in is forming with higher highs than lows. The main question is whether bears would allow $2800 support to be considered a higher level of support.
A retesting of horizontal resistance within the range $3500-3600 would be possible if this happens. The price could rise to $4000 if it breaks and forms another higher high. Although sellers still have the upper hand, it seems that the downtrend momentum has slowed somewhat.
Support Key Levels: $2500 & $2300
Resistance Key Levels: 3300 & 3600
The 4-Hour Chart
ETH trades below the descending line (marked in red) and the Ichimoku Cloud. This acts as a resistance. It is amazing that the downward momentum gradually drops in this timeframe. If ETH holds support at $2800, and builds a higher peak in this zone then one can expect bulls to retest resistance at $3000 which is the main barrier in a lower timeframe.
Analyse of the chain
Exchange Supply Ratio
The Exchange Supply Ratio can be described as the exchange reserve divided with the total supply of a particular asset like bitcoin.
The chart shows that despite price drops, this metric continues to show a downward trend. This is similar to what we’ve seen in past uptrends. Investors are not willing to deposit tokens onto exchanges at the moment.
Marla Brooks – Financial Analysis
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