As a followup to our Bitcoin’s price action and prediction post, we decided to have a look at the other heavily traded cryptocurrency, Ethereum. Just like the rest of the crypto-atmosphere, Ethereum (ETH) has also taken a significant hit during this past few months. In fact, from what you can see in Figure 1 below, since May 5th, 2018 – just 54 days – ETH has lost about 50% of its value. There are various reasons as though why there has been such a significant decline in value, some may attribute this to the price of Bitcoin. It could also be due to the questions surrounding whether it is a security or not. A question that was recently answered by the SEC – which came to the conclusion that ETH is indeed NOT a security.
ETH seem to have found some momentum at towards the end of May as it bounced off of the $520 – $540 range. However, it quickly lost steam, and has been once again on a downward spiral.
The good news is that we believe that ETH is reaching a buy zone, which it could reach within the next few days. Let us look back to end of March / beginning of April, when we found ETH in the same territory (Figure 2). ETH found support in the $375 – $400 range, buyers came in, and in matter of 30 days, we saw the price of ETH rise about 120%.
As you can see in Figure 3, We believe that ETH may be reaching that essential buy zone again. This is the range that we will begin to look to accumulate ETH awaiting another potential run in the future. The first support line is the $375 – $400 range, with the second being the $280 – $300 range. Anything below that could spell disastrous for ETH.
We will continue to watch ETH in the next days to see how ETH behaves once it reaches this critical zone. If ETH begins to show strength and looks to break out of this downtrend, it could spell and end for this downward spiral. If there is a bounce and a breakout occurs, we encourage our readers to be weary of the $525 – $550 resistance zone. If ETH is to break that resistance zone, it could potentially run to $650 – $680 and then $750 – $800.
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