Is the resumption of the bear run of the prince of cryptos back in motion? – Against all expectations, Ethereum (ETH) suffered a real setback last week. Although this happened in a traditionally sluggish market period in terms of volume, it is clear that the technical rebound that began in mid-June is likely to be a thing of the past. However, during the previous market point, the prince of cryptos was on the way to going beyond the symbolic bar of $2000, and more precisely towards the resistance of $2300.
But on closer inspection, the technical rebound that doubled the price of Ethereum from the $1000 support has not really threatened the bear run since its last ATH in November 2021. With the prospect of he month of September, which often turns out to be unfavorable for risky asset classes, would revive the scenario of a return to the lows of the year in the direction of $1,000. And why not even the specter of a sustainable three-digit rating, no longer reviewed since the beginning of January 2021.
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Ethereum in weekly units – Prices close to Tenkan and $1400 support
When it comes to technical analysis, one should avoid jumping to conclusions about technical signals. And for proof, the previous week’s bearish candle materialized a false break of the resistance at $1700. Moreover, it is located not far from the Tenkan and the support of $1400. This testifies to a violent downward movement as $2,000 seemed within reach before August 15th.
Like what, nothing is ever won in advance. Especially since the Ichimoku curves in weekly units send us a pessimistic message in the medium to long term.
On the one hand, ETH prices and the Chikou Span remain deep below the Kumo (cloud), despite the technical rebound since mid-June. And on the other hand, if this week’s candle is of the same caliber as the previous one, it could well be that the Kijun, which is currently stable under the resistance of $ 2300, falters again as it was the case last May. .
In this sense, the hypothesis of a double break of the Tenkan and $1400 would be more topical than ever with, as a bonus, a return to square one towards $1000. That being said, the favorable scenario of a throwback on these same supports should not be ruled out. This would keep hopes for an extension of the technical rebound beyond $1700 to potentially reach the $2300 resistance. And at the same time, the prices of the prince of cryptos would narrowly cross the downward line of the bear run.
Ethereum in daily units – Do not push the $1200-1400 to hope for a continuation of the technical rebound
The coming days are going to be crucial for the prince of cryptos. Despite the false exit above the $1700 resistance, prices are struggling to stay above the $1400 support and the triple bottom neckline around $1200. As we speak, the essentials are safe and sound in the short term. However, they are now below the Tenkan and Kijun in daily units. And the fact that the evolution of the two curves of the Ichimoku are capping around $1700 would presage a possible pullback, that is to say a rebound on a former support which now becomes resistance, before continuing its downtrend. This would cast doubt on the holding of the summer technical rebound.
Same a throwback on the $1200-1400 support zone would not guarantee anything on the probability of taming the $1700 before the end of August. Conversely, a sinking of these key levels would coincide with ETH prices and a return of the Chikou Span respectively below and inside the Kumo. This would pave the way towards the $1000 support should volatility resume. which curiously went down without any first-rate positive catalyst.
Like it or not, Ethereum’s current bear run since its last ATH in November 2021 increases its chances of getting bogged down through 2022. Without prejudging what might happen next, we seem on track for a 2018 remake so far.
Not only could the Fed no longer afford to be accommodative again at the risk of sustaining inflation at a high level. But at the same time, an overly aggressive rate hike cycle would eventually cause a brutal recession given the level of government and private sector debt. This tricky equation does not argue for a return to grace in risk appetite.
Personally, I fear that the current uncertainties in the markets will resurface in the weeks to come. In line with the technical analysis, the trajectory of the future Kumo in weekly units would not be such as to suggest a reversal of the Ethereum trend. Especially since the fear of the truce of the bear run would gradually point the tip of his nose. And if that weren’t enough, the month of September is historically not very buoyant for risky asset classes. In which case, we should not be surprised by a next downward wave in the prices of the prince of cryptos below the lows of the year.
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