Ethereum - Panic creeps back into the market
Throughout July and August, we warned that the bounce in the cryptocurrency market, which many rushed to call a trend reversal, was a bear market rally doomed to fail. Then, on 16th August 2022, we gave an ultimate warning to investors as we speculated the top was in for the rally, and a 50% decline was looming.
Since then, the price of Ethereum has fallen an astounding 25%, and we have seen more confirmations of our bearish thesis. Because of that, we continue to be bearish in the short, medium, and long term. Indeed, we think the selloff will accelerate in the foreseeable future, leading to panic selling and subsequently to new lows over time.
Our views are based upon technical indicators that flash strong warning signs across the board and low liquidity in the market. However, fundamental factors also significantly contribute to our bearish opinion. Repeatedly, higher interest rates, quantitative tightening, and a slowing economy pose a great threat to the stock market and the cryptocurrency market.
Accordingly, we stick to our price target of 1 000 USD per Ethereum. However, we would like to set also a second price target for ETHUSD at 900 USD.
Illustration 1.01
The picture shows the daily chart of Ethereum and two moving averages, 20-day SMA and 50-day SMA. On 24th July 2022, these averages underwent mean reversion, signifying a powerful downtrend correction. We would like these averages to reverse into a bearish constellation to give us further bearish confirmation.
Technical analysis - daily time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the daily time frame is bearish.
Illustration 1.02
The illustration shows two bearish breakouts that confirmed our thesis in the past two weeks. Interestingly, these developments are identical to those on the chart of BTCUSD.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the weekly time frame is bearish.
Illustration 1.03
Illustration 1.03 shows simple support and resistance levels derived from peaks and troughs.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Since then, the price of Ethereum has fallen an astounding 25%, and we have seen more confirmations of our bearish thesis. Because of that, we continue to be bearish in the short, medium, and long term. Indeed, we think the selloff will accelerate in the foreseeable future, leading to panic selling and subsequently to new lows over time.
Our views are based upon technical indicators that flash strong warning signs across the board and low liquidity in the market. However, fundamental factors also significantly contribute to our bearish opinion. Repeatedly, higher interest rates, quantitative tightening, and a slowing economy pose a great threat to the stock market and the cryptocurrency market.
Accordingly, we stick to our price target of 1 000 USD per Ethereum. However, we would like to set also a second price target for ETHUSD at 900 USD.
Illustration 1.01
The picture shows the daily chart of Ethereum and two moving averages, 20-day SMA and 50-day SMA. On 24th July 2022, these averages underwent mean reversion, signifying a powerful downtrend correction. We would like these averages to reverse into a bearish constellation to give us further bearish confirmation.
Technical analysis - daily time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the daily time frame is bearish.
Illustration 1.02
The illustration shows two bearish breakouts that confirmed our thesis in the past two weeks. Interestingly, these developments are identical to those on the chart of BTCUSD.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the weekly time frame is bearish.
Illustration 1.03
Illustration 1.03 shows simple support and resistance levels derived from peaks and troughs.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
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