- Ethereum tumbles below the ascending channel as losses to $1,400 linger.
- The downtrend is validated from a short-term technical perspective based on the MACD.
- Support above the 200 SMA and a move past the 50 SMA would lead to gains targeting $2,000.
The cryptocurrency market is swimming in in red waters following the bearish wave on Monday. Ethereum dropped from highs above $1,900 to seek support at $1,700. The declines are believed to have come into the picture following the report regarding banning digital assets in India.
Despite the massive drop, Ethereum has weathered down the losses much better than Bitcoin, which drop from highs above $60,000 to levels around $54,000. At the time of writing, Ether is trading at $1,740.
The immediate downside is protected by the 200 Simple Moving Average (SMA) on the 4-hour chart. Further down, the 100 SMA is in line to provide support. If these two anchors fail to hold, investors can expect ETH to drop to $1,400.
Meanwhile, the Moving Average Convergence Divergence (MACD) validates the downtrend with its negative gradient. The MACD line (blue) already crossed under the signal line, signifying the increase in selling pressure. More losses will come into play if the MACD dives into the negative region.
The least resistance path is downwards amid a rise in volume. Therefore higher support is the only way to secure Ethereum for a recovery. Otherwise, the drop to $1,700 is quite conservative, keeping in mind the recent rising wedge pattern with a target at $1,300.
ETH/USD 4-hour chart
It is worth noting that support at the 200 SMA will return market stability. A stable market will allow bulls to focus on recovery. Settling above the 50 SMA at $1,800 would give way to gains eyeing $2,000.
Ethereum intraday levels
Spot rate: $1,745
Relative change: -55
Percentage change: -3%