Coindesk - 6/24/2020 8:18:05 PM - GMT (+0 )
- Ethereum has flashed signs of technical weakness overnight following a harsh rejection at $250
- This level marked its high-time-frame resistance, and its inability to break above it seems to elucidate underlying weakness amongst its buyers
- Analysts are noting that it could be poised to continue pushing higher despite this latest setback
- There is one crucial level that it is trading just a hair above that could invalidate this potential rebound
Ethereum has flashed signs of intense weakness today, with its latest rejection at $250 showing that its buyers remain fundamentally weak.
This has surprising to some investors, as the cryptocurrency has been incurring incredibly strong fundamentals in recent times.
The explosive popularity of DeFi coupled with heightened stablecoin issuance have both driven this usage and utility, while also ushering in a significant number of new users into the Ethereum ecosystem.
Nevertheless, this does not appear to have catalyzed any strong buying pressure, as Ethereum has been closely moving in tandem with Bitcoin over the past several weeks.
Analysts are now noting that it still remains positioned to see further upside, but there are several crucial levels that must be defended.
One of these levels is about to be broken by ETH, and this could work in bears’ favor.Ethereum Struggles to Garner Buying Pressure Following Rejection at $250
At the time of writing, Ethereum is trading down over 1% at its current price of $239. The cryptocurrency has been hovering around this level in the time following its latest rejection, and it does appear to be facing growing weakness.
Over the past several weeks, the crypto has been caught within a relatively wide trading range between $230 and $250. The latest rejection occurred at the upper boundary of this trading range.
Where it goes next could depend on its reaction to $238. One analyst spoke about this level, explaining that a break below this will invalidate his bullish sentiment.
“ETH LTF Update: Triggered my long position very tight SL, will close if we see the hourly close below $238, if we can see the RL get tagged then will add more to my position with confidence…”
Image Courtesy of Cactus. Chart via TradingViewHere’s Why One Analyst Thinks ETH’s Market Structure Remains Strong
Although a break below $238 could be imminent, another analyst does think that Ethereum’s bullish market structure will remain valid as long as it holds above the $228 to $230 region.
“Well, the $250 barrier still acting as resistance, while BTC is also inside the range. $228-230 should hold, might wick to there and close above $234 in general. Structure still valid.”
Image Courtesy of Crypto Michael. Chart via TradingView
Bitcoin will likely play a large role in Ethereum’s near-term price action. If BTC’s buyers are unable to defend the support it has at its range lows around $9,000, this could catalyze a sharp market-wide selloff.