Ethereum Confirms A Lower Low
JFD Team | Jan 21, 2022 07:55AM ET
ETH/USD traded sharply lower yesterday, after hitting resistance at $3265. The slide took the crypto below the $2918 level, marked by the low of Jan. 10, thereby confirming a forthcoming lower low. Overall, Ethereum is printing lower highs and lower lows below the downside line taken from the high of Dec. 1, which paints a negative short-term picture, in our view.
We believe that the break below $2918 may have encouraged more bears to join the action and thereby push the price to the $2715 barrier, marked by the low of Sept. 24. If they don’t stop there, we could see them diving towards one of the $2518 or $2435 barriers, marked by the lows of Aug. 5 and 3, respectively.
Should they stay willing to continue lower, the next stop could be the $2150 territory, marked by the low of Jul. 27. Looking at our short-term oscillators, we see that the RSI, already near 30, turned down again, while the MACD lies below both its zero and trigger lines. Both indicators detect strong downside speed and support the notion for further declines.
On the upside, we would like to see a clear break above $3405 before we start examining the case of a bullish reversal. This could confirm the break above the aforementioned downside line and perhaps pave the way towards the $3665 barrier, which acted as strong support between Dec. 13 and Jan. 3.
If the bulls have the strength to keep sailing north, we could see them targeting the $3880 barrier, marked by the high of Jan. 4, where another break could carry extensions towards the $4140 zone, defined as resistance by the peak of Dec. 23.
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