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Ethereum Price Analysis - ETH Falls To $3,000 As Needed Short-Term Retracement Begins

Ethereum

coincodex.com 18 August 2021 13:57, UTC
  
Reading time: ~5 m

Key highlights:

  • Ethereum fell by a sharp 8% today as the coin drops to $3,000
  • It is not battling to hold support at around $2,995, provided by a .236 Fib Retracement
  • Against Bitcoin itself, Ethereum fell from ₿0.07 to hit the 20-day EMA at ₿0.067

Ethereum fell by a steep 8% today as the cryptocurrency breaks back beneath $3,000. The cryptocurrency has been on a remarkable run since breaking above the descending wedge formation at the end of July. After breaking the wedge, ETH surged from $2,200 to reach as high as $3,400 at the start of this week.

The price hike was largely attributed to the fact that Ethereum upgraded its network in the London Hard Fork, which saw EIP-1559 turning ETH into a deflationary asset as a portion of the transaction fees is set to be burnt.

So far, around 6,090 ETH are being burned per day, worth around $19 million. This is quite extraordinary as it pushes ETH in the direction where the total number of coins available to be bought will continuously decrease. Since the London hard fork on August 5th, a total of $172 million worth of ETH has already been burnt from existence.

In addition to the burning, the total number of ETH on exchanges also seems to be dropping quite dramatically.

The chart from CryptoQuant shows that the total number of ETH on exchanges has been consistently declining since September 2020 and recently established a new two-year low as it sits at just 19.25 million ETH available to be purchased on exchanges.

Lastly, it seems that Ethereum 2.0 validators continue to pour ETH into the ETH2.0 smart contract. The ETH 2.0 staking contract is now sitting at a new all-time high of 6.7 million ETH being staked on the Ethereum 2.0 Beacon Chain:

? #Ethereum $ETH Total Value in the ETH 2.0 Deposit Contract just reached an ATH of 6,727,938 ETH

View metric:https://t.co/SzbMPqvhlb pic.twitter.com/YXWA0PHKII

— glassnode alerts (@glassnodealerts) August 15, 2021

The recent price drop has caused the ETH market cap to hit $353 billion. 

Ethereum Price Analysis

What has been going on?

Looking at the daily chart above, we can clearly see the epic surge since ETH broke the descending wedge at the end of July. Initially, the surge was contained inside an ascending price channel, but it eventually broke toward the upside of the price channel in the first week of August.

On Friday, ETH surged upward from $3,060 to reach as high as $3,400 on Monday. It was at this price that ETH rolled over and started to fall. Yesterday, it fell beneath the support at $3,150 and continued lower to crash beneath $3,000 today to hit the support at $2,995, provided by a .236 Fib Retracement.

The daily RSI has been showing bearish divergence over the past week, and a retracement was expected - especially after the extended bullish run that Ethereum recently witnessed. 

Ethereum price short-term prediction: Bullish

ETH is certainly bullish right now. The coin would now need to drop beneath $2,500 (200-day EMA) to turn neutral. It would have to continue further beneath $2,000 before being in danger of turning bearish in short term.

Moving forward, if the bears break the current $2,995 support, the first strong support lies at $2,930 (200-day EMA). This is followed by support at $2,800 (downside 1.272 Fib Extension), $2,750 (.382 Fib Retracement), $2,650 (downside 1.618 Fib Extension), and $2,550 (200-day EMA).

Where is the resistance toward the upside?

On the other side, the first resistance lies at $3,155 (bearish .5 Fib Retracement). This is followed by resistance at $3,300, $3,400, $3,432 (1.618 Fib Extension), and $3,500 (bearish .618 Fib Retracement).

Additional resistance then lies at $3,600, $3,650 (1.272 Fib Extension), $3,800, and $3,865 (1.414 Fib Extension).

ETH/BTC price analysis

What has been going on?

Ethereum also recently rolled over against Bitcoin as it fell back beneath ₿0.07 and hit the support at ₿0.067, provided by the 20-day EMA and a .382 Fib Retracement. ETH had pushed higher against BTC in the first week of August to reach a high-day closing price at ₿0.0708. 

From there, it struggled to establish further momentum after barely maintaining a daily closing candle above ₿0.07 for just one day.

The rollover was expected after a mammoth push higher after surging from ₿0.06 to ₿0.07 in a short few days.

ETH/BTC short-term prediction: Neutral

The break above the July high has turned ETH bullish. However, it must continue beyond ₿0.07 to sustain this bull run. A drop beneath ₿0.066 (200-day EMA) would turn the market neutral, with a further drop beneath ₿0.06 turning the market bearish.

Looking ahead, if the sellers push beneath ₿0.067 (.382 Fib Retracement), the first support lies at ₿0.066 (200-day EMA). This is followed by support at ₿0.0651 (.5 Fib Retracement), ₿0.064 (50-day EMA), and ₿0.0632 (.618 Fib Retracement). Added support lies at ₿0.062, ₿0.0605 (.786 Fib Retracement), and ₿0.06.

Where is the resistance toward the upside?

On the other side, the first resistance lies at ₿0.069 (bearish .618 Fib Retracement). This is followed by ₿0.07, ₿0.0708, and ₿0.072. Added resistance lies at ₿0.0727 (bearish .786 Fib Retracement), ₿0.074, and ₿0.075 (1.414 Fib Extension).

Keep up to date with the latest ETH price predictions here.


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