Amid Widespread Sell-off, ETH Bears May Breach $1600 support

The Ethereum (ETH) price lost 0.236 Fibonacci retracement support with today’s price drop, indicating a minor correction. This breakdown increases the chances for the price to retest the $0.382 FIB level at $1600. However, a drop below the 0.382 FIB level will trigger a significant correction, and losing 0.5 FIB will reflect weakness in bullish momentum.

Key points from ETH analysis:

• The daily-RSI slope nosedive below the neutral line
• The bearish crossover of the 20 and 100-day EMA will bolster the ongoing correction
• The intraday trading volume in Ethereum is $22.7 Billion, indicating a 42% gain

Source-  Tradingview

Over the last month, ETH/USDT market value nearly doubled, outpacing Bitcoin’s gain. The altcoin’s north walk showed a steady breakout of higher resistance and formed a local top at $2000 psychological resistance.

Furthermore, on August 14th, the ETH price reverted from the $2000 resistance with an evening star pattern and triggered an occasional bull trend pullback. However, recent news that the US Fed may increase the interest rate by 0.75% ignites a sudden sell-off in the market.

As a result, the ETH price dropped 8% today and nosedive below the combined support of $1775, 20 EMA, and 100 EMA. Furthermore, a decisive breakdown from the mentioned support with increased volume activity indicates the current correction may extend longer.

Thus, a daily candlestick closing below the $1775 mark will flip this level into potential resistance. An expected retest may offer an entry opportunity for short sellers before the prices drop another 6.5% to retest the $0.382 Fibonacci retracement level at $1600.

If the selling pressure persists, the ETH price will breach this mentioned level and drop a 10% to hit the 50% retracement level.

Technical indicator-

EMAs: the 20-day EMA provided dynamic support to the ongoing recovery rally. However, a breakdown from this support bolsters the correction theory.

RSI: the daily-RSI slope dropped from the overbought region to bearish territory within a week, indicating a sudden and unhealthy shift in market sentiment. Thus, it means the market may remain uncertain for a few sessions, accepting or rejecting the recent drop.

• Resistance level- $1780, and $2000
• Support level- $1600 and $1420