It is a crypto meltdown. The system is fracturing, and Ethereum price is no exception.
As of writing on Feb 23, the ETH/USD price is changing hands at $1.48k, shedding 19 percent on the last day alone.
Panicking traders are disposing of their coin in lower time frames as adjudged by sharp losses in the hourly chart.
Ethereum prices are bouncing off sharply from the $2k resistance level, looking likely to find support at $1.4k or Jan 2021 highs. However, accompanying the selloff are above-average trading volumes. ETH/USD traders are rushing for the exits, dumping their assets, therefore heaping more pressure on exhausted bulls.
According to trackers, ETH trading volumes are up 34 percent on the last day. Since prices are breaking down, falling off the $2k cliff, these appear to be selling volumes.
Depending on how prices react at $1.48k, the selloff of the last two days could be abated or intensified if there is more liquidation at spot levels.
Ethereum (ETH) Price Overview
The ETH/USD price is at risk of sinking lower if bears don’t slow down. After two days, ETH price is down over $300, free-falling to $1.5k and retesting Jan 2021 highs.
Notably, today’s selloff is a confirmation of the bear break-out pattern of Feb 22. Therefore, in a double bar bear reversal pattern from February 2021 highs, the ETH/USD price could slide lower, deflating bulls.
In the immediate term, ETH price could swing back to the primary trend. It depends if there is a sharp reversal from spot levels above $2k and the middle BB—previous support now resistance, pumped with above-average trading volumes.
On the contrary, the rapidity of the last few days’ price action could mean determined bears and a correction following sharp gains registered from Dec 2020.
Accordingly, traders should watch how prices react at $1.5k. Further losses below this support level with high trading volumes may see additional dumps towards $1.2k—or worse.
Ethereum (ETH) Market Movers
The Ethereum network is a smart contracting platform, the first and the most widely adopted.
Because of its consensus algorithm, the platform frequently faces congestion challenges as fees rise to unreasonable levels.
According to BitInfoCharts, a single TX on Ethereum costs $31. The result may be from the scrambling of traders to exit their long positions. This translates to congestion, fuller blocks, and miners confirming transactions with higher Gas fees, pushing rates higher.
Rising median transaction fees are forcing Binance to intervene, temporarily suspending withdrawals:
ETH is super congested now, at 1200+ gas. @Binance have suspended withdrawals.
There was a conspiracy theory that Binance is deliberately making ETH gas fees high. 😂 Let's see it come down a bit. pic.twitter.com/tNK9b3b9OK
— CZ 🔶 Binance (@cz_binance) February 22, 2021
Supporters are drumming up for Layer-2, saying a resolution of Gas issues in Ethereum will “obliterate competitors.”
I can't wait for Ethereum's layer 2 ecosystem to absolutely obliterate the competition and all of the haters.
— Anthony Sassano | sassal.eth 🏴 (@sassal0x) February 23, 2021
Ethereum Price Prediction
The ETH price is down double-digits on the last day, losing 19 percent.
Notably, there is a confirmation of Feb 22 bears.
From the daily chart, today’s climactic selloff is pushing prices below the 20-day moving average of the Bollinger Bands – one of the most widely used cryptocurrency trading indicators. This breakout suggests pessimism. As such, subsequent liquidation may see ETH/USD prices reach $1k.
Technically, a break below $1.4k could see ETH bears take charge, driving prices to $1k—the 38.2 percent Fibonacci retracement level of Dec 2020 to Jan 2021 trade range. However, if bears press even lower, prices could tumble back to $650, the 78.6 percent Fibonacci retracement level of the same trade range.
On the other hand, there will be a reprieve for buyers if prices recover, reversing today’s losses and rising above $1.8k. It may affirm bulls, creating room for a possible snap back to trend.
Chart courtesy of Trading View
Disclaimer: Opinions expressed are not investment advice. Do your research.
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