Ethereum fell below its $1,600 support level and showed bearish sentiment on the chart. Broader market weakness has also contributed to Ethereum’s current price action.
Bitcoin had fallen to the $20,000 mark and altcoins were showing similar price moves.
Ethereum over the past 24 hours has shown slight appreciation on the chart. The technical outlook for the altcoin remained bearish.
Buying strength had dropped over the past couple of days and at press time, the coin’s movement was dominated by sellers.
Continued selling pressure can take ETH to the $1,100 price level before it begins to gain momentum again.
In case the bulls return to the market, ETH may continue to consolidate on its chart and then try to move higher.
Buying strength also needs to recover significantly for Ethereum to invalidate the bearish thesis. Over the past week, Ethereum has lost 4% of its market value.
Ethereum Price Analysis: Four-Hour Chart
ETH was trading hands at $1472 at the time of writing. After Ethereum suffered a steep drop, it tried to slowly recover, but the bearish pressure was still strong in the market.
The overhead resistance for the altcoin was $1,542 and a current drop in price will take ETH to $1,260.
For the bearish thesis to be negated, Ethereum must trade above the $1,600 mark for more than a few trading sessions. If the buying strength is not consistent, Ethereum can drop to $1,100 in no time.
The volume of ETH traded over the past session has increased, indicating that the buying force has struggled to move north on the chart.
Technical analysis
The altcoin over the past 24 hours has seen some price increase, although the technical outlook was bearish, the buying force attempted to rally.
The Relative Strength Index was below the half line, but over the past few trading sessions there has been a slight uptick in the indicator.
This meant that buying strength was recovering on the four-hour chart.
Despite the rally, the price of the altcoin was below the 20-SMA line, a reading below the 20-SMA line indicates that sellers are driving price momentum in the market.
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Falling prices can be directly related to a sell signal. Moving Average Convergence Divergence represents price momentum and reversals in the same.
MACD underwent a bearish crossover and flashed red signal bars which are related to the sell signal of the coin.
The Directional Movement Index shows the price direction and the next direction of the coin. The DMI was negative because the -DI line was above the +DI line.
The average Directional Index (red) was below the 20 mark, which signified that the current price action was running out of steam.
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Featured image from UnSplash, chart from TradingView.com