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Highlights
- Ethereum price is sliding lower and is in line with Bitcoin’s drop.
- Investors can expect ETH to slide 5% as sell signals multiply.
- The $3,500 to $3,352 support level is crucial for Ether and will determine if the correction will extend.
Ethereum (ETH) price is sliding lower, in line with the rest of the crypto market. The drop comes as BTC slides below $100K again. As mentioned in a previous article, ETH sell signals have been hinting at this crash for the past week. With ETH down 5% from Friday’s high, how low can ETH price go?
Three Reasons That Suggest Ethereum Price Will Drop
Ethereum price set up higher highs since November 11, while the Relative Strength Index (RSI) has been producing lower highs. This divergence between price and RSI is a clear sell signal that hints ETH will drop lower.
The second reason is the declining momentum pointed out by the Awesome Oscillator (AO). The momentum indicator AO has spent most of its time above the zero line since November 11, with the exception of a few brief dips. With the bearish divergence and Bitcoin sliding lower, a spike in selling pressure could unfold soon.
The third reason for this could be ETH tagging the $4,000 psychological level. Typically, retest of key levels often leads to a correction and profit-taking. Hence, the ongoing correction and a potential extension of this drop could occur in the near future.
Ethereum Technical Analysis: How Much Can ETH Crash?
Considering that the value of ETH rose for 25 days when the Relative Strength Index (RSI) and the Awesome Oscillator (AO) were both dropping, was a big tell tale sign of a potential exhaustion. The 5% crash since Friday’s high suggests that investors are booking profits. So, to answer the question “Will ETH go lower?” Yes, Ethereum price will likely continue its descent until it finds a strong support structure to bounce from, aka until it finds a demand area.
However, one nuance that can be expected is a bounce from the $3.8K to $3.9K demand zone to sweep the buy-side liquidity at $4,024. A strong rejection here could crash ETH down by 9% to $3,701, which is the first key support level. If the selling pressure is not satiated at this point, Ether could slide lower to retest the previous monthly Value Area High (VAH) or the weekly Volume-Weighted Average Price (VWAP) at $3.518.
Ethereum price prediction hints that a breakdown of $3,518 would be a critical juncture and could trigger a 4% to 10% crash to $3,368 or $3,161.
On the other hand, if Ethereum price bounces from the $3.8K to $3.9K support level, and sets up a new high above $4,087, it would invalidate the bearish outlook and the sell signal. Such a development could see ETH attempt a revisit of $4,500 and a retest of the $5,000 psychological level.
Frequently Asked Questions (FAQs)
1. Why is Ethereum price sliding lower?
2. How low can Ethereum price go?
3. What needs to happen for the bearish outlook to be invalidated?
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