What’s been going on?
Ethereum has suffered a 4.78% price decline in price over the past 24 hours of trading. The Ethereum market is currently exchanging hands at a price of $206 after the cryptocurrency sees a 6.36% price hike over the past 7 trading days.
Ethereum has been through the mill over the past few weeks as the market collapses below the $200 handle for the first time in over 14 years. Ethereum has since recovered and is now trading over $200 as the latest news of the new EVM update called eWASM.
What is eWASM?
eWASM is an update the Ethereum Virtual Machine (EVM) that runs and executes all the smart contracts on the Ethereum network. eWASM is expected to be faster and built with scalability in mind. It will also allow developers to code in more languages than just Solidity, which is the only coding language which the EVM currently can currently handle.
For more information on eWASM, check out our latest article.
Where is Ethereum ranked?
Ethereum is currently still holding the number 2 position in terms of market cap rankings across the entire industry. It currently has a $21.15 billion market cap after the 37-month-old coin suffers a 60% price drop over the past 90 trading days. Ethereum is now trading at levels 85% lower than that of the all time high price.
Let us continue to analyse price action for Ethereum and update our support and resistance levels.
ETH/USD – MEDIUM TERM – DAILY CHART
A brief catch up
A lot has developed since our last technical analysis update in August. At the time, we were trading at the downside 1.618 Fibonacci Extension level (drawn in blue) priced at $271.95.
We had expected this price level to hold and stated if the market would collapse below this level further support could be expected at the longer termed downside 1.414 Fibonacci Extension level priced at $226 followed by the $200 handle.
So what actually happened?
We can see that price action fell through all of our expected support levels during the initial trading week of September 2018. Price action broke below the support at the downside 1.414 Fibonacci Extension level priced at $226 and continued even further below the $200 support level.
We can see that price action had found a level of significant support at a short term downside 1.272 Fibonacci Extension level (drawn in dark blue) priced at $181.88. As the Ethereum market approached this area of support, it was rejected heavily and caused the market to rebound.
Where are we now?
The recent price rebound has pushed the market higher to meet resistance at the downside 1.414 Fibonacci Extension level priced at $226.98. We can see that the ETH/USD market has now established a trading range with the $226.98 handle acting as the upper boundary and the $181.88 handle acting as the lower boundary.
Where can we go from here?
If the recently seen bullish action can continue and push price action above the upper boundary of the range, priced at $226.98, then we expect further immediate resistance higher to be located at the downward sloping trend line.
This trend line has been in play for the majority of the trading year and the Ethereum market has not been able to break above the resistance line since. Because of this, the ETH market would require significant momentum to be able to break above this resistance.
If price action does break above this trend line we expect further resistance higher to be located at the previous downside 1.618 Fibonacci Extension level (drawn in blue) priced at $271.95. We can see that this price level has provided significant support in the past and therefore will be expected to provide significant resistance moving forward.
What if the bears regain control?
Any initial bearish pressure will be supported by the psychological $200 handle. Further support below is then expected to be absorbed by the lower boundary of the trading range priced at $181.88.
If ETH/USD price action does break below the lower boundary of the range then further support below will be expected at the $160 handle followed by support at the downside 1.414 Fibonacci Extension level priced at $148.47.
What are the technical indicators reading?
At this moment in time, the technical indicators are currently leaning towards favouring the bears. The RSI is still trading below the 50 handle indicating that the bear is in control of the momentum. If we would like to see some positive gains within this market we would need to see the RSI breaking back above the 50 handle.
Let us continue to quickly analyse price action for Ethereum over the shorter time frame for those who cannot keep their eyes off of the market!
ETH/USD – SHORT TERM – 1HR CHART
How has price action been over the past few days?
Analysing the Ethereum market from the short term perspective above, we can see that price action had experienced a small bullish run as ETH/USD started at a low of 167.51 on September 12, 2018, and extended to a high of $228.08 on September 15 2018. This was a price increase totalling 36% from low to high.
What’s been going on?
We can see that after placing the high, price action rolled over and began to retrace. We can see that the market fell until support was found at a short term .382 Fibonacci Retracement level priced at $204.95.
Where can we go from here?
If the bearish pressure within the market continues and pushes price action below the .382 Fibonacci Retracement level, we can expect further support at the .5 and .618 Fibonacci Retracement levels priced at $197.81 and $190.68, respectively.
If price action continues to fall further lower more support can be expected at the .786 and .886 Fibonacci Retracement levels priced at $180.53 and $174.48, respectively.
Alternatively, if price action can regain bullish momentum and break above the recent high at $228.08 we expect initial resistance to come in at the 1.272 Fibonacci Extension level priced at $245.04 followed by the 1.414 Fibonacci Extension level priced at $253.69.