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ETH Could Start A Violent Dump To The $250 Level: Analysis

09/27/2020

ETH could start a violent dump to the $250 level as it tapped the key resistance recently and went through a turbulent period following Bitcoin. Ethereum however amplified the gains and losses that were seen by the number one cryptocurrency as we are reading more in the latest Ethereum price news.

Today it was quite slow for ETH as the price consolidated after the recent rally. The push higher came about shortly after the capitulatory decline to the $318 level and the bulls were able to push the asset higher to $355. This is a point at which the momentum stalled and the price started plunging lower. One analyst even said that the key diagonal resistance was having a lot of influence over the recent trend and that it ETH could start a violent dump soon.

eth daily
ETH 24-hour Price Chart (Source: Coingecko)

Ethereum’s price was struggling to gain a solid ground after it was rejected in the upper $300 region which is around the same level the cryptocurrency slowed down its rally and it saw a capitulatory downturn. The decline sent it reeling to new lows of $318 before it found meaningful support and the rebound from these lows was strong which allowed the surge back above $350. Since then, it lost the level but it could now be at risk of cutting deeper into the recent gains. One analyst set his sights on a move towards $250 noting that ethereum is retesting the diagonal resistance level which catalyzed a few sharp sell-offs.

eth price
Ethereum price trades above $350. Source TradingView.com

At the time of writing, Ethereum is trading down at over 1% with a current price of $345 which marks a decline from the daily highs of $355 but recovery as well from the weekly lows of $318. The recent price action was similar to the one of Bitcoin and it seems that the benchmark cryptocurrency has major control over the aggregated market’s near-term trend. Because it posted a strong rejection at the daily highs of $10,800, there’s a huge chance that it will create a headwind for Ethereum.

While speaking about the technical outlooks, one analyst observed there’s a diagonal resistance level formed which sparked a few violent rejections that were broken above:

 “Interesting price action with ETH… Diagonal resistance saw countless rejections. When broken price aggressively pumped, however upon retest violent dumps always followed. How to swing play: 1) Let it break out, buy retest with invalidation back inside 2) Pray for 250$ and buy.”