While the recent declines have been relatively mild, largely attributable to the lack of volume and volatility since mid-October, an extended bearish trend has been intact for some time, with ETH/USD having slumped from the first week of May swing hi $828.97 to a mid-September swing lo $167.
Since the mid-September swing lo, ETH/USD attempted a run at the 23.6% FIB Retracement Level of $323.23 in late September, with a high $255, but came up well short and it’s been millpond since for ETH/USD and the broader market, barring a number of anomalies including Bitcoin Cash’s recent moves ahead of Thursday’s hard fork.
For the crypto bulls, the line in the sand is $220, with ETH/USD pulling back on any attempts at a breakout to late September’s $255 high.
At the time of writing, ETH/USD was down 0.88% to $206.93, with the negative bias intact, ETH/USD falling from a start of a day morning high $208.77 to a morning low $205 before steadying, the tight ranges leaving the day’s major support and resistance levels untested.
For the crypto bulls, the good news has been the significant support at $200, with buying appetite evident on any pullbacks to sub-$200 levels, though the lack of a catalyst for the broader market continues to leave ETH/USD pinned back at sub-$220 levels.
For the day ahead, the early losses may be heavier than recent days, with negative sentiment surrounding the Bitcoin Cash hard fork weighing, but with the day’s first major support level at $206.77 there to provide ETH/USD with the necessary support to avoid another reversal to sub-$200 levels, treading water for now may not be a bad thing.
Longer term, the general outlook for ETH/USD and blockchain technology adoption remains positive, with ETH/USD’s position and function within the cryptomarket supportive of an eventual recovery, though this may take some time, regulatory uncertainty continuing to limit any broad-based market recovery.
For the bears, today’s third major support level at $200.56 will be the key test, buying appetite expected to pick up, though any material reversal could see the mid-September swing lo tested before any recovery.