ETH price technical analysis (20–26 Sept): Will $3,000 hold?

Ether may witness aggressive selling below $2,893.79

Ether cryptocurrency                                 
Ether has plunged below the moving averages. Pic: Shutterstock
                                

During a live stream at the SALT Conference recently, Cathie Wood, chief executive of ARK Invest,  said that the asset manager’s future crypto exposure would be 60% bitcoin and the rest 40% in ether. “I’m fascinated with what’s going on in DeFi, which is collapsing the cost of the infrastructure for financial services in a way that I know that the traditional financial industry does not appreciate right now,” Wood said.

Crypto analytics provider IntoTheBlock recently tweeted that $1.2 billion worth of ether left centralised exchanges during a 24-hour period on 16 September. The last time $1bn was withdrawn from centralised exchanges was in April, and that was followed by a 60% rally in the subsequent 30 days.

In another positive move that could take ether mainstream, Adam Aron, chief executive of the movie theatre chain AMC Entertainment, recently announced that ethereum, litecoin and bitcoin cash will also be accepted along with bitcoin for purchasing movie tickets by the end of the year.

Is the current correction in ether a buying opportunity or is it the start of a new downtrend? Read ether’s price trend analysis to find out.

Ether price technical analysis: weekly chart

Ether price technical analysis weekly chart

Ether’s price formed a Doji candlestick pattern last week, indicating indecision among the bulls and the bears. The ETH/USD pair dropped 2.20% to end last week at $3,329.19.

The bears are currently attempting to resolve the uncertainty in their favour by pulling the price below the immediate support at $3,110.24. If they succeed, the pair could drop to the 20-week exponential moving average (EMA).

This is an important support for the bulls to defend because if it cracks, the pair could decline to $2,410.17.

However, both moving averages are sloping up and the relative strength index (RSI) is in positive territory, indicating advantage to buyers. If the price rebounds off the 20-week EMA, the pair will again try to rally to $4,000.

Ether price technical analysis: daily chart

Ether price technical analysis daily chart

Ether’s price broke above the overhead resistance at $3,570.86 on 15 September but the bulls could not sustain the higher levels. The pair turned down from $3,677.55 on 16 September, indicating that traders are booking profits on rallies.

The bulls bought the dip on 18 September and attempted to stall the decline but the bears had other plans. They sold aggressively and have pulled the price below the 50-day simple moving average (SMA) today. The 20-day EMA has started to turn down and the RSI has dipped into the negative zone, indicating that bears are in control.

The pair could now decline to the critical support zone of $2,987.48 to $2,893.79. This is an important zone to watch out for because if it cracks, the traders may rush to the exit. That could result in panic selling, pulling the price down to $2,443. Such a deep fall will indicate a change in trend.

Contrary to this assumption, if the price rebounds off the support zone, the bulls will again try to push the pair above the moving averages. If that happens, the pair could rise to $3,677.55.

ETH price technical analysis: trading this week

Ether has turned down and broken below the 50-day SMA, indicating that supply exceeds demand. The selling could intensify further if bears sink and sustain the price below the $3,000 support zone. This negative view will be invalidated if the price turns up and breaks above the moving averages.

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 and you should do your own research or contact your financial adviser before arriving at a decision. 

Trade Ethereum to US Dollar - ETH/USD chart

Ethereum to US Dollar
Daily change
4009.03
Low: 3989.75
High: 4283.31

Further reading: How to trade ethereum: the ultimate guide

Further reading: What is ether? Your simple guide to the cryptocurrency

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