Ethereum Forms a Bearish Rejection Just Below a Key Resistance Level
Ethereum has seen some sizeable gains over the past several days and weeks, although this uptrend may be short lived due to a top formation that it just posted on its daily chart right below a key resistance level.
This comes shortly after the cryptocurrency broke below its macro adoption curve, and the confluence of these bearish factors may suggest that ETH is primed to see significant near-term downside.
Ethereum Struggles to Break Key Resistance, Signaling a Massive Downturn Could Be Inbound
At the time of writing, Ethereum is trading down over 3% at its current price of $161, which marks a sizeable retrace from its intra-rally highs of over $170 that were set early yesterday when the crypto’s recent rally turned vertical.
The gains that have come about over the past couple of weeks have been quite significant for ETH, as the cryptocurrency has been able to rally from lows within the $120 region to highs of over $170.
This massive rally has occurred in tandem with the uptrend seen by Bitcoin and most other major altcoins and has led many investors to grow increasingly bullish on the markets.
This bullishness may be short lived, however, as Ethereum’s decline from its recent highs seems to mark a rejection just below a key resistance level, signaling that it may soon retrace much of its recent gains.
Livercoin, a popular crypto analyst on Twitter, pointed this out in a recent tweet, in which he concisely says “yikes” while pointing to the below chart showing the crypto’s daily price chart with highlighted resistance levels.
This isn’t the only bearish factor currently counting against Ethereum, as the crypto also recently broke below its macro adoption curve, an important level that it has yet to regain.
Financial Survivalism, another popular cryptocurrency analyst, spoke about ETH’s decline below its adoption curve in a recent tweet, noting that if it becomes resistance, it could spell trouble for the altcoin markets in general.
“Bear Case: There is a strong case to be made that $ETH recently broke down its adoption curve, and that this is just a throwback to retest prior support for resistance. If that is the case then it would indicate a macro shift in the trend for $alts in general,” he noted.
If ETH is unable to reclaim this key level, and shows further signs of reversing its recent uptrend, it could be in for a significant drop in the near-future.