Popular crypto exchange FTX’s collapse is crushing and brutally killing the crypto market as the industry continues to flash red.
Moreover, FTX’s recent chapter 11 bankruptcy filing may bring more downside spirals and hit the market harder than ever.
Multiple cryptocurrencies have lost more than 40% of their value due to the impact that plummeted the global market cap to $780 billion, the lowest since 2021.
The current bearish trend created selling pressure among Ethereum investors, forcing them to liquidate all positions to get a smooth road for ETH’s downtrend.
Ethereum Trades At Risky Resistance Level!
The FTX crash has become an obstacle for Ethereum in initiating a clear positive momentum in the price chart. The current market sentiments are creating a long fearful trend for ETH price, meaning investors need to have more patience before witnessing a bull run.
In the current situation, some crypto experts are predicting more price drops for Ethereum as a prominent crypto analyst firm, Bitcoinsensus, predicted that Ethereum may soon get a strong rejection as it is showing a continuous price fluctuation in a huge resistance zone of $1,200-$1,300.
Moreover, Ethereum may begin an extended bearish trend soon as the transaction fee of ETH has touched a peak level since 2020, as a massive amount of Ethereum is withdrawn from exchanges by whale investors following the sudden collapse of FTX.
According to data by Glassnode, the on-chain activity of ETH has increased as nearly 1 million of Ethereum has been liquidated in the last week, hinting at a bearish consolidation for Ethereum.
Where Is Ethereum Heading Next?
Ethereum has recently witnessed an increase in the liquidation of future contracts since August, as nearly $260 million worth of future contracts were liquidated, representing less interest from daily traders of Ethereum.
Looking at the daily price chart, Ethereum recently attempted to break its support level at $1K as it made a low of $1,073 on 9 November.
Ethereum is currently trading in a dangerous zone as a downward retracement below its immediate support level of the Bollinger band’s lower limit at $1,160 may further push Ethereum below the price range of $1K.
The MACD line is not promising as it is gaining pace downside and making a long bearish candle, indicating a negative territory for Ethereum’s current price movements.
The RSI-14 line dropped from a level of 60 to 29, which kicked off a sharp downtrend for Ethereum.
However, the RSI is now slowly climbing upwards as it has recovered from its bottom and currently trading at 41, indicating a support region with substantial volatility for the digital asset.
Ethereum may witness a short-term bullish rally if it holds its price above the Bollinger band’s upper limit at $1,361.
ETH is predicted to show its true bullish potential by the beginning of 2023 if the crypto market favours.
The current bearish trend of Ethereum is short term as it is usual for every digital asset to plummet due to the news of a crash; as Sam Kopelman, UK manager at Luno, noted,
“History shows that crypto does tend to recover after a sustained dip, and investors have certainly not lost interest.”
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