Ethereum started rising rapidly from April 6 when it began its journey from $144 and soon after crossed the $175 mark. However, in the past two days, it has lost more than half of those gains.
Ethereum could drop much lower than current levels
As of writing this article, Ethereum created the day’s low of $152.50. The day’s range of the cryptocurrency has been $152.50 — $171.15. However, this is most likely to fall even further. And here’s why I make that statement:
- The daily chart shows that Ethereum’s upward move from April 6 onwards was associated with meager volumes. This indicates the presence of market manipulators who stood to benefit from a fake rally. Artificially increasing the price allows those aggregators to square off their holdings in Ethereum at higher prices.
- From the beginning of April, volumes were pretty low for Ethereum. However, as soon as the decline began on April 8, there was a large red candle with a significantly higher volume. This indicates the presence of Ethereum holders who were waiting for a price rise.
- The RSI is heading towards the 20-oversold region on the 20,80 RSI table. This indicates a further price drop could be likely.
- The above point gets reiterated by the downward crossover of the MACD line.
- Volumes have continued to stay high while the prices kept dropping. This indicates that the Bears are overpowering the Bulls.
Until unless there is strong fightback against the Coronavirus pandemic, investors are likely to flee riskier investments and turn towards safer assets. Till then, it would be best to stay cautious and not catch the falling knives.
Check out ETHUSD Chart on TradingView.
