If Bitcoin (BTC) had an atrocious day yesterday, Ethereum’s (ETH) day was whatever adjective is worse than that, with its highest ever loss in value in a single day versus USD. On that chart, its market structure and uptrend has been annihilated; but by virtue of being an altcoin, we have, by convention, two charts to look at – and here the latter may surprise us a bit.
We first look at the damage on the 3-day ETH/Dollar chart, and see that Ethereum briefly dipped below $100 yesterday, testing a multi-year low in the process. This means that Ethereum’s promising 2020 uprend profile was wiped out in just a day.
ETH chart by TradingView
Although we can expect some bouncing and relief, in the bigger picture, we should expect sideways consolidation at best and new lows at worst.
Moving to the ETH/Bitcoin chart, however, we see something interesting. The most important level on this chart is the ‘Capitulation Line’ (dotted), which marked the level Ethereum held above between 2017 and 2019, and recently regained in 2020.
ETH chart by TradingView
Yesterday, this level was sliced through clean during the selloff; but it has since been retaken again. If we see this level held on the weekly chart, it would be an interesting conclusion to such a dramatic week. Stabilizing above that level would give us a tiny glimmer of hope that Ethereum can hold on to some semblance of strength.
Finally, down to the short term, we see what may be a local (if nothing else) bottom and precursor to a small relief rally. We see a neckline forming on a head-&-shoulders, and a bull divergence on the RSI.
ETH chart by TradingView
Again, it cannot be emphasized enough that both medium and high-timeframe trends are now squarely bearish, so LTF buying is trading explicitly against the trend – this is dangerous stuff.
We wait to see how this bloody week plays out in the markets.
The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.
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