Written by Tshire Mokou 1st September 2018. Published on Dapp.tech 2nd September 2018.
Ethereum’s Ether (ETH) price has taken a substantial fall since the highs seen earlier this year. ETH/USD remains in a downtrend and prices have failed to break back up anywhere near the $800 USD seen in the April/May ETH bull run. Price has continued to make lower lows and may continue to do so in the near-term.
Ethereum has not had a great deal of positive fundamental information or news released of late. Notably, a large majority of ICO fundraising is collected in Ether (ETH) and some major competitors to Ethereum (eg. EOS) have raised substantial funds in Ether that can be used to suppress price in the smart contract platform wars. These fundamental factors have likely played a significant role in the length and severity of the downturn in ETH/USD’s price and may continue to apply price suppression pressure resulting in prices dipping even lower. These factors have caused the market to be wary of buying up more Ethereum at this stage that could’ve seen an earlier reversal of the downtrend.
Possible Near-Term Outcomes
Price has not broken above either of the 14 or 50 period EMA’s (exponential Moving averages) so this would indicate that a trend is set in place. The price of Ethereum’s Ether (ETH) is hovering above its previous 2017 support level of $280 US dollars.
Other technical factors attributing to a move to the downside:
⦁ Price currently touching the 14 EMA and historically price has reacted towards to downside when it touches the EMA.
⦁ Price has continued to break and close below each level of support set at the $595 – $600 range and $400 level.
⦁ Price is creating confluence with the support price level of 280 and the 14 period EMA.
The expectation is price will continue downtrending in the near-term with a possibility of reaching as low as $200 – $150 price range. The $200 – $150 price range represents the August – September 2017 lows right before the upswing.
If the price level of $280 – $300 USD holds up as a support then there is a possibility of a push up, however there are some technical factors standing in the way of a near-term Ethereum uptrend.
⦁ Price would need to find strong support at $280.
⦁ Price would then need to pass through both the 14 and 50 EMA levels in order to test the first level of resistance at around the $400 USD level.
⦁ Depending on the consistency or strength of that push up, price again would need to pass through the important psychological level of $500 USD, which in July could not do at that stage.
ETH/USD remains in a downtrend, however the expectation would be to see price hold at its current level and allow for the EMA’s to touch before we should expect a change of trend. The expected upside price would be $400 in the medium to short-term.
Long to Medium-Term Outlook
ETH/USD has been in a major downtrend for most of the year and it’s possible this trend still has some ways to go heading towards the $150 level.
Due to the massive amounts of Ether held by ICO funded projects and some powerful smart-contract competitors, there is a chance we’ll see it continue down further from here. Yet with that being said, when you look at the overall set up, we are getting close to an anticipated ETH/USD trend reversal.
The $300 USD level would be the point that the downtrend would be tested so we need to see a break above $300 that turns into a strong support level to start expecting higher prices again.
If the Ethereum team and related projects continue to present a high level of progress (Scalability, Casper, Sidechains, etc) and the large sell-offs from competitors and ICO projects slow then we should see overall confidence in the project continue to rise. When the ETH/USD downtrend confirms a trend reversal, we should see a large number of bulls (including institutional investors) entering the market helping to absorb the ICO and competitor “sell-offs” and as such should then see prices move much higher in the medium to long-term.
Written by Tshire Mokou 1st September 2018. Disclaimer: This is not financial advice please do your own independent research.