Ethereum was forced down another gruesome ride on Monday during the European session. The second-largest cryptocurrency follows Bitcoin price action closely. As BTC dived under $9,000 for the first time in June, Ethereum broke below last week’s support at $225. At the moment, the digital asset is trading at $224 after establishing lower support at $220.
Despite the massive drop, Ethereum has been able to defend the ascending channel support. As long as Bitcoin this support stays intact, the potential for a reversal would remain high. This support is also aided by the 61.8% Fibonacci retracement level taken between the last swing high at $290.43 to a swing low at $91.41. In addition to that, the daily chart shows Bitcoin Cash trading above the moving averages.
In this case, the 50 SMA is in line to offer immediate support while losses under $200 will sort to seeking anchorage at the 100-day SMA. From a technical point of view, Ethereum is likely to enact a reversal above $225. The RSI has slowed down the downward momentum. Holding above the midline would encourage more buyers to enter the market.
7:19 AM
According to the MACD, sellers still have the upper hand. However, this does not mean buying activity is non-existent. In fact, the indicator is still holding in the positive region. It shows that there is enough bullish activity to keep Ether above the key support at $220. On the downside, the bulls lack the volume and a catalyst to effect a significant recovery and sustain gains.
Spot rate: $224
Relative change: -7.27
Percentage change: – 3.14%
Trend: Bearish
Volatility: High
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