ETH price technical analysis (13–19 Sept): Will the $3,000 support crumble?
The price of Ether could drop to $2,893.79
The sharp recovery in ether’s price led to a massive build-up in ether (ETH) futures open interest, which hit a new all-time high of $11.68bn on 6 September, according to Bybt data.
This overhang of huge derivatives positions may have been one of the reasons for the sharp sell-off in ether on 7 September, which dragged it close to $3,000 in intraday trading.
Analysts at Standard Chartered believe ether could be a better bet than bitcoin (BTC) in the long term. They anticipate ETH to rise from about $26,000 to $35,000 in the future, but did not commit any timeframe for this prediction.
According to Markets Insider, the analysts said that although ether’s target “may appear high compared to the current ETH price… we think the current price reflects both the relative complexity of ETH (versus BTC) and the uncertainty around ETH's development”.
After the recent correction, could ether bounce back sharply, or is it vulnerable to another round of selling? Read ether’s price trend analysis to find out.
Ether price technical analysis: weekly chart
The long tail on last week’s Doji candlestick shows that the bulls purchased the dip, but they have not been able to build on the rebound. This suggests that the bears are selling on relief rallies. The bears will now try to sink the price below the 20-week exponential moving average (EMA).
If they manage to do that, the pair could extend its decline to the 50-week simple moving average (SMA). The negative divergence on the relative strength index (RSI) suggests that the bullish momentum could be slowing down.
Contrary to this assumption, if the price rebounds off the 20-week EMA, the bulls will make one more attempt to push the price above the overhead resistance zone of $4,000 to $4,381.71.
Ether price technical analysis: daily chart
Ether’s price plummeted below the 20-day EMA on 7 September, but rebounded off the 50-day SMA. The bulls pushed the price back above the 20-day EMA on 8 September but the bears were in no mood to relent, and instead pulled the price back below the 20-day EMA on 9 September.
Since then, the bears have thwarted repeated attempts by the bulls to drive and sustain the price above the 20-day EMA. This suggests sentiment has turned negative and traders are selling on rallies.
The 20-day EMA has turned down and the RSI has slipped into negative territory, suggesting an advantage to the bears. If the price breaks below the 50-day SMA, the pair could drop to $2,893.79.
This is an important level for the bulls to defend, because a break below it could result in panic selling. The bulls will have to push to sustain the price above the overhead resistance at $3,570.86 to suggest that the correction could be over.
If they succeed, this could open the doors for a rally to $4,000.
ETH price technical analysis: trading this week
Ether has been oscillating between the 20-day EMA and the 50-day SMA for the past few days. If the bears pull the price below the 50-day SMA, the selling could intensify and the pair may drop to the critical support at $2,893.79.
This negative view will be invalidated if bulls thrust the price above $3,570.86.
The views and opinions expressed in the article are those of the author and do not constitute trading advice. Trading and investing involve substantial risks, therefore you should do your own research or contact your financial adviser before deciding to invest.