ETH Falls Beneath June Support But Holds Descending Wedge

20 ביולי 2021

• Ethereum dropped by a sharp 7% today as it plummets into the $1,700 region.
  
  
• The cryptocurrency remains inside a descending wedge but is testing the lower boundary.
  
  
• Against Bitcoin itself, Ethereum is battling to remain above a rising trend line at ₿0.059 after falling beneath the 100-day MA last week.
  

Ethereum fell by a sharp 7% today, mainly because BTC lost the ground beneath 30K. Despite today’s price fall, ETH has been trading lower since the start of July after failing to break resistance at $2,365, provided by the 50-day MA. Since then, it has been trading inside a descending wedge formation, and today’s price fall has dropped into the lower boundary.

The 7% price drop today also caused ETH to fall beneath support at $1800 (.886 Fib) and, if today’s candle closes beneath there, it would be the lowest daily candle close since March.

The recent price plummet has many investors on edge ahead of the significant London network upgrade. ETH holders have been looking forward to the upgrade as it will introduce a highly anticipated EIP-1559 change that will start to make Ethereum deflationary crypto.

Scheduled for August 4th, the EIP-1559 update will introduce a “burning” mechanism in which the base fee is burnt, and an optional tip is paid to the miners.


Ethereum Price Analysis


What has been going on?
Taking a look at the daily chart above, we can clearly see the breakdown in price action through July. The cryptocurrency found support at $1,800 (.886 Fib Retracement) toward the end of June and rebounded higher from there. Unfortunately, ETH was unable to break resistance at $2,365 at the start of July, provided by a 50-day MA and a bearish .236 Fib Retracement.

It rolled over from there and started to head lower inside the current descending wedge formation that has formed. Toward the middle of July, ETH fell beneath the 200-day MA and continued to head lower.

Today’s 7% price fall has now caused ETH to drop beneath $1,800 and reach as low as $1,700 today. If today’s daily candle was to close beneath $1,800, it would produce the lowest daily candle closing price since March.

Ethereum price short term prediction: BEARISH
Unfortunately, the break beneath the $1,800 level has turned ETH bearish in the short term. We would still need a daily candle closing beneath $1,800 to confirm the break, but it is looking highly likely. To turn neutral, ETH would have to break back above $1,800. ETH would need to continue higher and break the resistance at $2,365 (July highs) to turn bullish.

Looking ahead, the first support lies at $1,715, the lower angle of the descending wedge formation. This is filled by support at $1,700, $1,650 (June lows), $1,600, and $1,577.

Additional support then lies at $1,510 (March lows), $1,500, and $1,455 (downside 1.272 Fib Extension).

Where Is The Resistance Toward The Upside?
On the other side, the frist resistance now lies at $1,800. This is followed by $1,900 (upper angle of the wedge), $2,000 (20-day MA), $2,075 (200-day MA), $2,200, and $2,365 (bearish .236 Fib & July highs).