Times are tough for cryptocurrency investors/traders. The entire sector has indeed seen its total market capitalization drop below the 2 trillion dollar mark. And it is not the collapse of Ethereum (ETH) below the support around $2800 that will cheer them up. Let’s face it, the accumulation of negative signals both at the technical and fundamental level do not plead for a comeback for the prince of cryptos, who himself is bearing the brunt of the bad moods of Bitcoin.
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Ethereum Holds Up Not To Fall Below Kumo In Weekly Units
When nothing goes with such a butchery on ETH prices, taking a step back seems essential in the face of the unleashing of bad news. By quickly sinking $2800, the bearish momentum since its ATH of November 10, 2021 takes on even more weight. When will this descent into hell end?
Isn’t the surge of the last hours above $2,300 a first sign of a rebound that would restart its forward march?
The prince of cryptos had his worst week since he came close to $4900. The large weekly bearish candle (green dot) was devastatingly powerful for people who thought the lows had already been reached. Faced with a resurgence of volatility during the year 2022 linked to the absence of monetary support from central banks, this does not encourage us to be optimistic in the immediate future.
If cryptocurrency proponents are desperate for some reason to hope, they may find some support from some constituents of Ichimoku. At present, Ethereum saved the essentials by not going below Kumo. The fact that they remain above the lower limit of the cloud, the Senkou Span B (SSB), means that the sellers have not completely gotten the better of the buyers.
Moreover, the position of the Chikou Span above the Kumo and its support on the Tenkan could serve as restoring forces instead of concluding hastily on the entry of a bear market. And it would not be a coincidence that Ethereum suddenly woke up on the intermediate support around $2300.
Signs of oversold that would lead to a bounce above $2300 but…
Last week in daily units, Ethereum failed in its quest to recross $3400. Now, the prince of cryptos experienced further disillusion by savagely breaking the support around $2800 before stabilizing on the intermediate support of $2300. However, it happens sooner or later that the decline becomes excessive. Some signals on the daily chart suggest that a rebound is on its way.
On the one hand, the slope of the angle of the secondary trend line (orange dot) since the week of December 28, 2021 is less acute. This makes the downtrend fragile. On the other hand, the large gap between ETH and Tenkan prices would mean oversold.
The hope for a bounce above the $2300 intermediate support would become more credible if the prince of cryptos successively breaks above the $2800 resistance and the secondary trendline. At the same time, this would cause prices to break above the Tenkan.
From there to claim victory over an upward trend reversal would be to take wishes for realities. Just look at the many technical hurdles to overcome. The fact that ETH and Chikou Span prices remain far away from the Kumo shows that the sellers have the upper hand in the short-medium term.
In summary, we will have to remain vigilant on the maintenance of the intermediate support around $2300 in the near future. Ethereum’s negative spiral over the past few weeks would fade if a rebound above this level continues under certain conditions. The observation that the prices of ETH are far from the Tenkan and the Kijun in weekly units would support this scenario which I would describe as a “convalescent phase”.
In the event of a failure below $2300, the prince of cryptos would return to square one at $1800, a drop of around $3000 since his last ATH. A new demonstration that reminds us that the financial markets force us to be humble.
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