Ethereum has stuttered in its pursuit of surging above the $2,300 level of resistance, subsequently falling back to the $2,000 level of support following a gruelling 11.64% sell-off over the past 48 hours.
The world’s second largest cryptocurrency has now re-established itself in a bearish posture on both lower and higher time frames, with the potential of a major correction to below $1,000 still on the cards before the end of the year.
Sunday’s weekly candle close beneath the 21 exponential moving average was the first since April, 2020, demonstrating that momentum in the long term is most certainly heading to the downside.
One glimmer of hope for Ethereum is the upcoming EIP 1559 update scheduled to go ahead later this month. As with most major news events, Ethereum will likely rise on a hype-fuelled rally going into the event, before crumbling to new lows afterwards.
In order to regain a bullish posture, Ethereum needs to close this weekly candle back above the 21EMA at $2,155. Failure to do this will likely result in a slump back to the $1,700 level next week.
Much of it will also depend on the trajectory of Bitcoin, which appears to be struggling to gain a foothold in the $30,000 to $40,000 range after suffering a rejection at $36,500 on Tuesday.
If Bitcoin loses the $30,000 level of support, the entire cryptocurrency market will struggle as a result, especially as Bitcoin dominance has steadily risen following the drop to $30,000 in May.
Short term levels of support for Ethereum remain at $1,875, $1,700 and the previous all-time high of $1,450.
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Ethereum was launched by Vitalik Buterin on July 30 2015. He was a researcher and programmer working on Bitcoin Magazine and he initially wrote a whitepaper in 2013 describing Ethereum.
Buterin had proposed that Bitcoin needed a scripting language. He decided to develop a new platform with a more general scripting language when he couldn’t get buy in to his proposal.
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