The short-term outlook does not look very encouraging for ETH, as there are still no signs to confirm it has bottomed out. It could be a good sign that the price has quickly overcome the selling pressure, considering it is above a relevant support zone.
Some problems with the Beacon Chain, an Ethereum testnet, recently led the price of ETH to drop by almost 12%. That situation adds to the collapse of LUNA and UST, causing further fear in the crypto market.
ETH is trading at around USD 1,749 and has accumulated a 13.6% loss over the last week. While its trading volume is above USD 23.47 billion, its market capitalization is about USD 212.01 billion, according to CoinGecko.
The Beacon Chain is an online testnet that may allow giving way to a proof-of-stake (PoS) validated mainnet. The developers of Ethereum believe that it is a more efficient and scalable protocol.
The abovementioned Ethereum testnet, which will introduce the new transaction validation model, recently underwent an in-depth reorganization of 7 blocks. Since such changes usually occur when detecting malicious activity or network error, fear arose among investors.
The news about the issue with the Beacon Chain made the market react with negativity. There is a sharp increase in open interest in ETH futures positions, which might soon boost volatility.
Weekly Technical Analysis of the Price of Ether
According to the weekly ETH/USDT chart, there has been bearish behavior. For that reason, the recent drop in the price of Ether did not impact that outlook much.
The price remains above a relevant monthly support zone of around USD 2,000. At that level, there will possibly be at least a bullish respite.
The price quickly rejected the low it had reached at USD 1,735, thus fueling the possibility of a rally.
The current scenario does not look very encouraging for the Ethereum cryptocurrency in the short term. There are still no signs that confirm that the bearish cycle has bottomed out. If the selling pressure increases, the price might head for the next significant demand zone around USD 1,300.
However, the overall picture of the market suggests that the price of ETH could be about to bottom out. It is reaching very significant support levels and rapidly overcomes the bearish trend.
Daily Analysis of the Price of Ether
The daily ETH/USDT chart shows that Ether has quickly overcome much of the recent selling pressure. That could be a good sign, considering that the price is above a relevant support zone.
ETH has remained locked in a small descending channel, while the Relative Strength Index (RSI) registers increasingly high lows. That force divergence is a sign of a possible setback in the price in the short term.
A rebound from the current price should be large enough to confirm the resumption of the bullish trend. A respite may only be a reversal before continuing the search for the bottom.
By Alexander Salazar
