Today, the cryptocurrency market experienced a large-scale liquidation event, as news broke out about the US SEC lawsuit against major crypto exchanges Binance and Coinbase. Market leaders, including Bitcoin and Ethereum, felt the jitters, dropping by 2.5% and 6.5% respectively on intraday levels. Following this decline, Ethereum lost its crucial monthly support of $1775-$1765, suggesting that coin holders might be in for an extended correction phase.
The Ethereum daily chart shows a high momentum breakdown from the $1775-$1765 support level. This loss implies that the ongoing correction phase could prolong if the daily candle closes below the $1765 support. With long-term Ethereum trends remaining bullish, as long as the support trendline holds, would the SEC lawsuit prove to be a minor obstacle for the network’s growth?
According to market signals, if the $1765 support level breaks, the selling pressure might accelerate, providing trades with short selling opportunities. With sustained selling, Ethereum’s price could tumble by another 5.5%, reaching the longstanding support trendline. In the past, a retest of this support trendline often triggered significant recovery in Ethereum’s price, validating it as a crucial accumulation zone. Thus, potential traders should keep an eye on this dynamic support when looking for dip opportunities.
Notably, today’s sell-off was backed by high trading volume ($4.6 billion), which could be an indicator of strong conviction from sellers to push Ethereum’s price even lower. With the breakdown of the $1775-$1765 support levels, the coin is more likely to plunge towards the next major support of $1700, followed by the combined support of $1650 and the ascending trendline.
The daily Average Directional Index (ADX) slopes upwards, highlighting the sellers’ growing strength in the market. Additionally, the Bollinger Band’s lower band downtick underlines high momentum selling in the market.
Nonetheless, Ethereum’s co-founder recently pointed out three key transitions to watch as the network evolves. It is crucial for investors to remember that market conditions are subject to change. Therefore, conducting thorough market research before investing in cryptocurrencies remains of utmost importance. This article reflects the author’s personal opinions, and neither the author nor the publication accepts responsibility for any financial losses incurred by its readers.
Source: Coingape
