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Ethereum (ETH) is at threat of firmly giving up the $200 level, on the back of a crypto market wide sell-off.

  • ETH/USD breaks aggressively from rising wedge pattern, running towards third consecutive week of losses. 

  • Ethereum Price Pressure

    The Ethereum (ETH) price came crashing out from a rising wedge pattern on Thursday. As a result, it dropped over 10%, briefly breaching the big psychological $200 mark. This still appears to be at threat, a daily close below could be very punishing. Current bearish momentum may keep ETH/USD on course to retest September 12 low, $167. ETH/USD looking to require a retreat back towards the mentioned low, where a demand zone awaits.

    Ethereum Related News Flow

    A large volume drop in users for all Ethereum decentralized applications (Dapps) has been observed, according to data statistics from DappRadar. Looking at the period from the month of May to October 2018, the drop with volume of users, fell from a peak of 32,000 down to 14,000. Worth of note, in July it fell to a minuscule 4,000 users. In terms of the average, the number of users for all network applications, was seen at around 10,000 per day, over the last two months.

    Ethereum Losing out to EOS

    Further looking into the data, it is reported that the total daily active users was seen at 65,000. This number was across two platforms, Ethereum and EOS. Most noteworthy, around a chunky 51,000 were on EOS. Furthermore, 45,000 of daily active users were on Dapps which were associated with gambling.

    Technical Review – Daily Chart


    ETH/USD daily chart

    ETH/USD is currently running at three consecutive sessions of losses. The price was within consolidation mode, trading sideways, after the falling market. Since the bounce on 12th September, a lack of movement has really been observed. Market participants have not demonstrated willingness to commit. During this same time period, ETH/USD price action formed a small rising wedge pattern formation. Playing to the textbook, ETH/USD made an extended breakout south. Price pressures came during Asian market hours. It appeared to be the case that stops were triggered to the downside, with seemingly Bitcoin leading the way, causing a domino effect. Bears will likely target a retest of the 12th September low at $167, a breach may invite a fresh wave of selling pressure. Finally, in terms of resistance, this could now likely be observed underneath the broken wedge pattern, around $230.

    Technical Review – Weekly Chart


    ETHUSD weekly chart

    Moving on from the above daily analysis, a weekly view is quite interesting in highlighting the potential downside risks that may loom. At present, ETH/USD is currently running towards its third straight week of losses. This is the biggest loss streak seen since the sell-off from the week commencing 30th July to the week of 20th August. Consequently, if selling momentum maintains its course to break the 12th September low, eyes will then look to the week commencing 10th July low at $135.96.

    Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

    Featured image courtesy of Shutterstock.

    Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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    Ken Chigbo

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      Ken has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.

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