With Bitcoin (BTC) again in the doldrums, Ethereum (ETH) is again following the market leader down for another tumble – this time into the key breakout zone from earlier in 2019.
We start with a long chart to get the lay of the land, on the ETH/USD weekly. We can see ETH is starting to test the previous resistance zone starting at $165. It took Ethereum a considerable amount of time to break this area – it was first defined in the 2018 bear market – so we can expect it to serve as strong support.
But we can also see that this area has been retested a few times already. What’s more, the trend seems to remain down, with the 21 EMA still sliding lower. The histogram on this chart, where last week it seemed to be arching up modestly, has so far in the week completely reversed course down. Closing this volatile week in this profile would be bearish.
Moving to a 12-hour ETH/USD chart, we can see Ethereum moving in step with the Bitcoin dump, and largely mimicking the former’s chart. It is retesting the exact same local support zone for the third time in three months, starting at $160.
There is not much to convince us that this level will hold again. There is no divergence on the oversold RSI, and the histogram has begun accelerating to the downside on what was already a bearish profile.
Finally, looking at the ETH/BTC daily, we see that Ethereum’s recent habit of moving with Bitcoin continues – amplifying Bitcoin’s price movements in terms of ETH/USD. From here, ETH looks likely to test the 55-day EMA at least. And with Bitcoin now looking like a larger downtrend, Ethereum is likely to follow.
We can see that Ethereum’s most recent support starts at about ₿0.0195; and with the histogram now smoothly accelerating to the downside, it seems highly possible that this zone will be retested. Ethereum’s “capitulation level,” which saw the leading altcoin return to 2017-era prices against BTC, looks like it will hold a while longer.
In sum, the action lately has been neither in Bitcoin nor in the mega-cap alts like Ethereum. Rather, we have seen the most gains in some mid-cap altcoins. Ethereum looks tied to Bitcoin; and with Bitcoin pointing ever more down, we can expect even more downside for ETH.
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