ETH dropped below a key support in its USD and BTC pair, but analysts say a bullish trading pattern could eventually spark a sharp trend reversal.
The cryptocurrency market was hit with another round of selling on May 26 as Bitcoin (BTC) price dropped to $28,000 and Ether (ETH) briefly fell under $1,800. The ETH/BTC pair also dropped below what traders deem to be an important ascending trendline, a move that traders say could result in Ether price correcting to new lows.
Here’s a rundown of what several analysts in the market are saying about the move lower for Ethereum and what it could mean for its price in the near term.
Price consolidation will eventually result in a sharp move
A brief check-in on what levels of support and resistance to keep an eye on was provided by independent market analyst Michaël van de Poppe, who posted the following chart showing Ether trading near its range low.
Van de Poppe said,
“The question will be whether we can bounce from here and break the $1,940 level. If that happens, I’m assuming we’ll continue $2,050. If it doesn’t, then the markets are looking at <$1,800 probably.”
ETH could make new lows into a bullish falling wedge
According to Twitter analyst Crypto Tony, Ether price is “still looking for that leg down to load up on.”
While it might look negative, this development is actually a positive sign, according to Cointelegraph contributor Jon Morgan, who noted that the pattern outlined on this chart is a falling wedge, a “bullish standard candlestick/bar chart pattern that is indicative of a market that has moved to an extreme and is likely to reverse.”
Morgan said,
“Very high expectancy rate of creating either a violent corrective move higher or an entirely new uptrend.”
Related: Ethereum price dips below the $1.8K support as bears prepare for Friday’s $1B options expiry
Bitcoin dominance rises
According to economist Caleb Franzen, the ETH/BTC pair lost a key support and this is notable because:
“This means that at least one of these statements will be true: $ETH is weakening relative to $BTC; $BTC will outperform $ETH; Alts will underperform $BTC.”
Adding to the ETH/BTC discussion, Twitter user CrediBULL Crypto noted that the price is “starting to take some of our local lows.”
The analyst said,
“Any relief here is temporary until we traverse to the bottom of this range, imo. In fact, we may head even lower than pictured here before staging a recovery, but will assess once we hit my target.”
In general, continued weakness with the ETH/BTC pair has the potential to result in the price of Ether and altcoins trending lower while BTC could hold at its current price or even head higher as traders rotate out of underperforming positions into Bitcoin.
The overall cryptocurrency market cap now stands at $1.235 trillion and Bitcoin’s dominance rate is 46.2%.
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Source: Cointelegraph https://cointelegraph.com/