Ethereum [ETH] investors were displeased after its inability to maintain a position above the basis line (green) of its Bollinger Bands (BB) for over two months now.
The aftermath of the recent Bitcoin rally has worsened ETH’s performance over the past four days. A rebound from the $1218 support could hamper short-term downtrends.
Losing this support could further extend the downside in the coming sessions. At press time, the alt was trading at $1210.7, down by 16.81% in the last 24 hours.
ETH Daily Chart
From a technical perspective, ETH exhibited one-sided bearish control. With sellers taking notice of the immediate and long-term trend, ETH was unable to demonstrate early signs of a trend reversal.
For over two months now, the price action swayed below the basis line of BB while constantly finding fresher multi-month lows. The largest alt shed over a third of its value in just the last six days. It was trading near its 17-month lows at the time of writing.
Should this 17-month support range cause a resurgence in buying, it could give the bulls a much-needed short-term push towards the $1400 area. Additionally, oversold readings on the BB have suggested that a rally may be due in the coming days.
But owing to its high correlation to Bitcoin and the high selling volumes, the alt could face a downside. Any close below the $1,100 range would set ETH up for a downward spiral toward the $1,096-level.
Rationale
The Relative Strength Index (RSI) marked a decent rally until the 44-point cap reversal. This reversal took him down to his all-time low at level 21 at the time of writing. A potential bounce can ease the heavy selling pressure.
Despite the token’s recent losses, the Aroon up (yellow) was yet to hit its 0% bottom. Thus, reaffirming a strong bearish control.
Conclusion
The bulls needed to step in to increase buying volumes in the $1,173 support region to avoid an additional 6-8% downside risk. Any improvement in sentiment can help ETH’s efforts to rebound towards the $1,350-$1,400 range.
Finally, investors/traders need to watch out for Bitcoin’s movement. Especially since ETH shares an approximate 65% 30-day correlation with the king coin.
