The second largest capitalization of cryptocurrency in the world, which was trading at about $ 740 a week ago, fell to $ 460 on Sunday.
This is the lowest level since December 11. Of 37.8 percent drop seems due to negative news on the Ether, and the overall situation on the market.
The reasons for the fall
The first factor that has seriously affected the price of Ethereum is that last week one of the senior officials of the Commission on securities and exchange Commission (SEC) said the Agency is investigating “dozens” ICO. Considering that the majority of ICO projects built on the basis of ERC-20 tokens, it is certainly negative news for cryptocurrency number two.
In addition, the ETH drop below $ 500 yesterday coincided with the announcement that the team EOS released about 400,000 tokens ETH. Although the token EOS built on ethereum, but it is competitive cryptocurrency.
The technical analysis prices
Currently ETH is trading at USD 535, and the high for today was $ 556 dollars. Retreat from the intraday high indicates that the increase from $ 460 was probably a “dead cat bounce” – a correction in a bear market.
The above chart (prices on Bitfinex) shows that the penetration shape head-shoulders, observed last week, confirmed the long-term trend change to bullish.
However, the relative strength index (RSI) and yesterday’s candle with a long tail, talking about the fact that Ethereum is likely to trade flat for the next few days.
Growth is restricted to the downward (bear) 10-day moving average (MA), while the previous daily low in a $ 452 may act as strong support, given the oversold conditions.
Ethereum may consolidate in the range of from 630 to 550 dollars for the next 48 hours.
Bullish scenario: only a daily close (UTC) above the resistance of the shape head-shoulders (former support) near $ 640 may suspend the bearish trend.
Bearish scenario: the repeated failure of breaking the resistance level of $565 (from 6 Feb) may lead to even greater sale of up to $385 (minimum of 30 November).