Ethereum (ETH) is likely to retrace to the bottom of the ascending channel it has been trading in as the price has failed to breach the $170 mark. Stochastic RSI on the 4H timeframe is now in overbought zone and signals a pullback in the near future. The price shot up after find support at a newfound trend line but it has now seen a loss of bullish momentum which means we could see a sharp decline soon as the price falls below the 50 EMA on the 4H time frame. If ETH/USD falls below this channel, we could see it decline all the way to December, 2018 lows. Such a decline would pave the way for Ethereum (ETH)’s ultimate decline to a price of $60 or lower to find its true bottom and put an end to the ongoing bear trend.
So far, the odds of a decline below $160 are higher than that of a rise towards $200. This is because we have yet to see genuine bullish interest return to the market. Most of the pumps and dumps we currently see are fueled by algorithms and bots that profit off overly ambitious retail traders with poor risk management techniques. As long as most of these quick buck artists are around, the price is not going to see a trend reversal. Every time, the price rises to a certain levels, traders will dump to make a quick profit or to break even. We have seen this happen in the past and there is no reason to assume this time will be different. In fact, we expect most of such short term buying and selling to go on for so long that mainstream investors will end up losing interest in the market.
The weekly chart for ETH/USD shows that Ethereum (ETH) might not take long to decline towards $60. In fact, the price has already run out of room trading within the bearish pennant and will soon have to break out of it. Even if there is a fake out to the upside which is very unlikely given the current near term outlook of ETH/USD, we will still see a sharp decline towards $60 in the weeks ahead. The price may end up falling quite lower than $60 but we expect it to close the week around that mark.
Ethereum (ETH) is currently trading way below its 50 week EMA and could end up closing the ongoing week below the 21 week EMA. If that happens, it will be the final nail in the coffin for ETH/USD wand we can expect the price to decline to the trend line support as early as next week. The more the price visits this trend line support, the higher the probability that it is going to eventually break it to the downside. Please note that our target of $60 per coin for ETH/USD is still a very conservative target considering the long term outlook of the cryptocurrency.