It has been a wild week for Bitcoin and the aggregated crypto market, and major altcoins like Ethereum (ETH) have been unable to avoid the massive volatility that has been brought about by Bitcoin’s relatively large price swings that it has faced over the past month.
This volatility has been overwhelmingly bearish for Ethereum and has led the embattled cryptocurrency to break below a key weekly support level, signaling that ETH could be at risk for incurring significantly further losses against both USD and BTC.
Ethereum Closes Below Key Technical Support Level
It is important to keep in mind that ETH is currently trading up significantly from its recent lows of $130 that were set on November 24th concurrently with Bitcoin’s capitulatory drop to $6,500.
Ethereum was able to post a rapid bounce from this price level, however, signaling that it was sold off and that this may mark a significant long-term support level.
Earlier this past week, on November 27th, ETH once again incurred a sharp influx of selling pressure that led its price to drop as low as $144, but buyers ardently defended this level and allowed it to surge slightly higher.
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In spite of the bounce from this level, Ethereum did close below its lower Bollinger Band on its weekly chart, which may point to underlying weakness.
“$ETH #Ethereum – Weekly chart – First breach of lower BB since December 2016,” Big Cheds, a popular cryptocurrency analyst on Twitter, explained in a recent tweet.
Where Will ETH Find Long-Term Support?
Although Ethereum’s previous close below its weekly Bollinger Band in 2016 was closely followed by a major rally, the conditions surrounding the aggregated crypto markets are overwhelmingly bearish at the moment, and it is unlikely ETH will break its close correlation to BTC and surge independently.
Nik Patel, another popular cryptocurrency analyst, explained in a recent blog post that he believes ETH has some support at $125, with its major support level existing at $100.
“There does not appear to be much support left below $125, so it is vital that price is able to remain above here. Given how Bitcoin looks at the moment, however, it appears that ETH/USD is poised for more downside. The following support would be at $100, which is a long way away,” he noted.
How ETH responds to its break below its weekly Bollinger Band in the near-term will likely offer significant insight into where it will trend as 2019 comes to a close.
Featured image from Shutterstock.
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