Ethereum (CRYPTO: ETH) plunged more than 15% on Monday, which Benzinga pointed out was likely to happen on Saturday if the crypto lost the $1,500 level as support.
News late Sunday night that crypto trading platform Celsius had decided to halt withdrawals, swaps and transfers between accounts, spooked investors who likely began to liquidate positions across similar exchanges out of fear more platforms may follow suit, contributing to the overall sector decline.
Celsius operates on the Ethereum network and the company’s decision to restrict trading on its app appears to have accelerated the crypto's decline.
Although the overall trend for Ethereum, and many other cryptos, is bearish, a bounce to the upside is due to come over the next few days because Ethereum is in need of a lower high in its downtrend.
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The Ethereum Chart: Ethereum has been trading in a fairly consistent downtrend since April 5, with the most recent lower low of $1,725 formed on June 7 and the most recent lower high within the pattern created at $1,832.31 two days later. Since then, Ethereum has declined more than 32% without printing another lower high.
- A bounce up to form a leg up in the downtrend is likely to come soon because on Monday, Ethereum’s relative strength index (RSI) plunged to the 22% level. When a stock or crypto’s RSI reaches or falls below the 30% level it becomes oversold, which can be a buy signal for technical traders.
- The move lower came on much higher-than-average volume, which indicates extreme fear has hit the crypto. As of press time, Ethereum’s volume on Coinbase was measuring in at about 775,000 compared to the 10-day average of 228,257.
- If Ethereum closes the 24-hour trading session at its low-of-day price, the crypto will print a bearish Marubozu candlestick, which could indicate lower prices will come again on Tuesday. If the crypto is able to bounce up to close the trading session with a lower shadow, the crypto may print a hammer candlestick, which could indicate a bounce is in the cards.
- The crypto has resistance above at $1,245 and $1,421 and support below at $1,085 and $905, with $1,000 being a key psychological level the bulls don’t want to see lost. A loss of $1,000 could cause a heightened level of fear that could throw the crypto into an even sharper freefall.
Photo: Hi my name is Jacco via Ethereum
