Ethereum continues to decline today, falling beneath another key fibonacci support at $450 and showing no signs of stopping. Trading volume has also dramatically cliff-edged for the #2 cryptocurrency, sliding almost $3,000,000,000 in 1 hour last Tuesday.
According to the latest figures released by Huobi Blockchain Big Data research, the reason behind this sudden decline appears to be the result of a number of debilitating factors on the Ethereum network, that is potentially making it unfavourable with investors and the wider community.
“The number of active addresses on Ethereum has continued to decline in three consecutive weeks, down by 6.6% to 1.56 million from 167.5 million in a week.”
“There is a 25% increase in overall transaction fee on Ethereum network this week from 13,000 to 15,000 ETH in a week.”
“The average value per transaction on Ethereum network is 3.55 ETH, a significant increase of 27.3% compared to 2.79 ETH last week.”
“The number of transactions per second on Ethereum this week has been decreasing constantly for 4 weeks straight, down 4.5% from last week to 8.4.”
Looking at ETH/USD chart over 1D candles we can see the asset has fallen inside a bearish descending triangle pattern, similar to a lot of the assets we’re seeing at the moment in the current market.
After falling below the 0.236 fib support at $466, Ethereum bulls tried to slow the asset’s descent with an early retest of this fib level but were unsuccessful in returning to this support area.
A bearish divergence between the 50/200 EMA lines give us a strong bearish signal that ETH will continue in this downtrend, with the next foothold down at $410 before the asset retraces to the lower descending triangle base support at $350.
A return to this price point will reflect the lowest price area we saw ETH drop to during the red market in April earlier this year. On that occasion, ETH was able to springboard over 140% back to $840 almost exactly a month later. Whether we see this market reaction again will largely depend on Bitcoin’s performance and the overall market sentiment in the next month, going into Q3. The crypto market capital is now at the lowest figures we’ve seen in 2018, holding firmly below $250 billion. We will need to see a further $200 billion enter back into the market if we are to reach the same levels that took cryptocurrencies out of the red during the last severe bear market.
Ethereum (ETH) Price Targets
All ROI and losses for these price targets will be set from the critical area along the 0.0 fib level at $351.
Looking at the price target chart above we can see that it’s very likely that Ethereum will retrace back to the lower pattern support area, along the 0.0 fib level. Here, ETH will enter into a critical zone, similar to the one we saw with Litecoin recently.
Depending on market sentiment, we could see the asset take back ground or fall further and reach a new year low.
Price target 1 (Bullish): Our first price target is at the 0.382 fib level at $538.03 ((53.28% ROI)
If bull traders decide to gather in numbers to capitalise on the cheap ETH price at $350, we could see the asset start to make a strong correction into a new bullish phase. Support in the opening run should be strong enough to take it beyond the red zone resistance and 0.236 fib level, as the trend reversal kicks off a FOMO buying frenzy among Ethereum’s substantial community.
We’d like the to see the bulls drive ETH all the way over the $500 mark before hastily correcting.
Price target 2 (Bullish): After correcting back to the lower 0.236 fib level at $466.55, bullish traders may be rested along the support well enough to attempt another surge. We could expect them to target the next fibonacci resistance above at $595 before taking profits. (69.74% ROI).
Price target 3 (Bearish): If the bear market continues and BTC fails to find inspire new investment, the rest of the market will likely plummet further.
From the critical area, the next support down for Ethereum is around $280 (-20.23% loss)
Price target 4 (Bearish): We would expect some buying pressure to pick ETH up a little from this support, but panic is a much stronger emotion than faith in this market and it’s likely we’ll see the asset find the bottom somewhere at $220 (-37.32%) before this asset starts to reverse.
This article appeared first on Cryptovest
