ETH price technical analysis (21-27 June): a drop to $1,730 is possible
If ether dips below the 200-day SMA, selling could intensify in the short term.
IOHK CEO and Ethereum co-founder Charles Hoskinson said in a podcast with computer scientist Lex Fridman that bitcoin, due to its slow speed, is at a major disadvantage to ethereum and other proof-of-stake networks. Hoskinson said that bitcoin’s proof-of-work consensus mechanism needs an upgrade.
Ethereum core developer Tim Beiko wrote in a blog post on the Ethereum Foundation’s website that three testnets named Ropsten, Goerli and Rinkeby have set block heights at which the London fork will go live. Ropsten is expected to go live on 24 June, Goerli on 30 June and Rinkeby on 7 July.
The London fork includes five Ethereum Improvement Proposals (EIP). The most keenly watched is EIP-1559, which aims to reduce the existing network fee structure, making the network more attractive for users.
However, the upcoming hard fork has not stopped the outflows from ethereum investment products. CoinShares Digital Asset Fund Flows Weekly report of 14 June shows that ethereum products witnessed record weekly outflows of $12.7m.
Will ethereum witness another downturn as institutions turn sellers or will lower levels attract strong buying? Read on to learn more about ether’s price trend analysis.
Ether price technical analysis: Weekly chart
Ether’s price is facing selling pressure at higher levels. The altcoin corrected 10.61% to end last week at $2,242.78. Although the price dipped below the 20-week exponential moving average (EMA) last week, the bulls purchased at lower levels.
However, the bears are unwilling to relent, with renewed selling this week taking the price below the 20-week EMA. This indicates that supply exceeds demand. The next stop could be $1,730.31. If that support also cracks, the decline could extend to the 50-week simple moving average (SMA).
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Alternatively, if buyers defend the $1,730.31 support, the ETH/USD pair will attempt to rise above the 20-week EMA. If that happens, the pair could remain range-bound between $1,730.31 and $2,914.63 for a few more weeks. A breakout and close above this range will suggest that the correction may have ended.
Ether price technical analysis: Daily chart
Ether’s price plunged below the trendline of the developing ascending triangle pattern on 18 June. This invalidated the bullish setup, trapping the aggressive bulls who may have purchased anticipating an upward breakout.
The pair has strong support at the 200-day SMA as bulls are likely to defend this level aggressively. If the price rebounds off this support, buyers will try to propel the pair above the 20-day EMA.
If they do that, the recovery could reach the overhead resistance at $3,000. A breakout and close above this level will indicate that the downtrend may have ended.
However, the 20-day EMA has turned down and the RSI has slipped into the negative zone, indicating advantage to the bears. If the sellers sink and sustain the price below the 200-day SMA, selling could intensify. The pair may then drop to $1,291.74.
ETH price technical analysis: Trading this week
Ether’s weakness negated the bullish ascending triangle pattern last week. The failure of a bullish setup is a bearish sign. If the 200-day SMA cracks, selling may intensify as traders who bought the recent dip rush to the exit. Therefore, traders could exercise caution and wait for a bottom to be confirmed before jumping in to buy.