Ethereum has mostly mirrored the run of bitcoin in the recent rally. This has seen the digital asset break as high as $3,000 once again for the year. This point, which has proven elusive for the cryptocurrency, has continued to give it a hard time. In previous times, Ethereum has had a while to stay above this level. Such has been the case this time, as he fails to secure his spot above the $3,000 e-dollar.
ethereal in decline
Like all other cryptocurrencies, Ethereum is a highly volatile asset and as such is subject to wild fluctuations in its price. For the past couple of months, it has fluctuated but mostly stayed around the $2,600 to $2,800=0 level. With the recent rally, it was finally able to break out of this trend and start a whole new one, one that saw it rise above the coveted $3K level.
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However, this recovery would be short-lived as ETH would not be able to maintain this position. Meeting fierce resistance from the bears at the $3,000 point, the digital asset failed to form any significant support above it. This meant that the price broke below it, but it would prove to be a continued downtrend given current indicators.
The drop below $3k saw the digital asset trade below its 50-day moving average. Now this is an incredibly important point for cryptocurrencies in general given their high volatility. With buyers unwilling to buy the digital asset at the prices of recent weeks, this indicates that Ethereum remains a seller’s market. Therefore, a continued downtrend is expected as more coins are released on the market.
ETH drops below $3k | Source: ETHUSD on TradingView.com
However, this does not mean bad news. A market like ETH can quickly turn into a buyer’s market, especially when prices are as low as they are right now. If this happens, Ethereum could very well see another 10% bounce that will consolidate its position above the $3k resistance point.
Market sentiments fall to fear
The Fear & Greed index had moved from fear territory to neutral at the start of the week, but this new wave of positive sentiment did not hold. The index has now returned to fear with a current score of 39 at the time of writing, showing that despite recent rallies, investor sentiment remains more negative than anything else.
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Ethereum and the crypto market are directly affected by investor sentiment as they show when investors are likely to put money into the market. Currently, with the index in fear, it shows that investors are very cautious about putting money into the market. However, this does not necessarily mean bad news for ETH.
Market sentiments fall to fear | Source: Alternative.me
Usually, when most investors are scared, it can present a good buying opportunity. In the past, whales have been known to take advantage of times like these to fill their pouches. If so, ETH may start another rally. But only a large absorption of current supply can start the digital asset down this path.
CNBC Featured Image, Chart from TradingView.com
This post Ethereum Sports Shows Bearish Signs As Cryptocurrency Market Returns To Fear
was published first on https://www.newsbtc.com/analysis/eth/ethereum-sports-bearish-signals-as-crypto-market-shifts-back-into-fear/