The return of Ether close to the USD 1,000 support would force the bulls to break beyond the USD 1,400 resistance. Since a pullback to USD 1,000 is likely, the bulls will have to get out of the USD 1,400 level.
After the collapse of FTX, many wonder whether the price of Ether (ETH) may imitate Bitcoin (BTC) through new year lows. Recent technical analyses indicate that it might return to the standards of 2018 in terms of a percentage decline.
The scenario of a new wave of correction continues to grow, as the engines that allowed it to straighten temporarily may be insufficient.
Amid a confidence crisis that affects the crypto ecosystem, the weekly and daily charts compare the price action of Ether with Bitcoin.
The Price of Ether Remains Trapped in the Bearish Cycle
Since mid-June, the rise in the ETH/BTC ratio has given a slight advantage to Ether against Bitcoin. The former could quickly return to test some resistances, not to mention there has been no new all-time high.
However, the news of the FTX collapse caused Ether to fall into the trap of the bearish cycle. At that time, Bitcoin, the leading cryptocurrency in the market, might have had the last word.
If the ETH/BTC pair breaks the support at 0.066, it will return to its 0.055 level in mid-June 2021. However, Ether is facing more difficulties than Bitcoin this time.
The Price of Ether Moves toward the Fourth Week of Decline
Last mid-August, Ether was close to USD 2,000, but now it could move toward a fourth consecutive week of decline. It has faltered below the USD 1,700 resistance again as it approaches the USD 1000 support. The situation regarding Ether against the various curves of the Ichimoku could deteriorate if the bulls do not do their work.
First, the thickness of the Kumo future increases much, complicating the prospects of a favorable trend change. Second, the bearish synchronization between Tenkan and Kijun could indicate that resuming the bearish run would only be a matter of time.
The return of Ether close to the USD 1,000 support would be in the offing. Since the bulls have received a hit on the nape, prices would have to break beyond the USD 1,400 resistance. However, that scenario looks unlikely due to the great size of the collapse of FTX.
Ether Might Drop to USD 1,000 or Rebound to year Lows
Since the value of Ether and the Chikou Span are below the Kumo, momentum degrades in daily units. First, Tenkan rejects the price where the problems of FTX started, but the USD 1,200 has given way since nothing has happened.
To the dismay of the bulls, the unfavorable signals mean the bearish move might resume more strongly. Therefore, USD 1,000 or the year lows would benefit the bears, allowing the new wave of correction to extend toward the USD 7,000 support.
However, nobody should rule out the possibility of a pullback to USD 1,000 or an immediate rebound from year lows. Besides, the bulls will have to get out of the Kumo and the USD 1,400 level to exit the crisis.
By Alexander Salazar