Ethereum (ETH) price has fallen significantly since September 11th but has reached a confluence of support levels that could start a recovery.
After numerous delays, the Ethereum merger finally went live on September 15, transforming the network into a proof-of-stake consensus. Now, previous Ethereum miners have flocked to Ethereum Classic, greatly increasing the hash rate in the process.
Additionally, it has massively reduced Ethereum’s power consumption, which in turn makes it a sustainable cryptocurrency. This should have positive long-term price implications for a number of reasons, including being more acceptable to green investors.
However, ETH price has fallen since the merger, even lagging behind Bitcoin (BTC). Below we will explore some reasons why this might have occurred.
A possible floor
ETH has been falling since hitting an all-time high of $4,868 in November 2021. The downtrend has led to a long-term low of $880 in June 2022. This seemingly led to a break of the $1,300 horizontal support area (red circle). .
However, the price recovered shortly after, reclaiming the $1,300 area in the process. It could now potentially validate it as support.
Despite this, the bullish reversal is not yet confirmed. This is because the RSI has not yet left its bearish divergence trend line (green line). Until that happens and the indicator then moves above 50, the long-term trend cannot be considered bullish.
The daily chart supports the possibility that ETH will recover soon. There are a variety of support confluences between $1,180 and $1,300.
This support area is created by:
- $1,250 horizontal support level
- Support line of a descending parallel channel
- Ascending support line (white)
- 1:1 length of waves A and C
Therefore, once the price reaches this level, there is a high possibility that it will bounce. A potential break out of the zone would instead suggest a fresh yearly low is being made.
ETH/BTC tracebacks
ETH/BTC has also been falling since September 7th. At this point, it had just completed a five-wave up move.
Since then it probably corrects within an ABC correction structure. Currently, ETH has bounced off the 0.5 Fib retracement support level at ₿0.067, possibly indicating that wave A is complete.
Therefore, it is possible for the b-wave to move back toward ₿0.08 before another drop that would complete the entire correction.
To be[In]Crypto’s Latest Bitcoin (BTC) Analysis, click here.
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