- Ethereum price fell almost in free fall by 17%, key levels were identified.
- ETH price has breached the 8-day and 21-day simple moving averages.
- The safest invalidation of the downtrend scenario is if the bulls can make a second attempt at $2,030.
Ethereum price’s profit-taking consolidation has turned into a selling frenzy. On lower targets, there could still be a potential opportunity to go for knives.
Ethereum price is moving south
Ethereum price has finally revealed its cards as the bears are down 17%. Thus, the bears successfully broke the ascending wedge, which is the main confluence signal for the discarded bears to enter the market.
As Ethereum turbulently surged near $1,900 in Part 1, on-chain analysis was used to understand the stagnant bullish move. Crypto Quant Exchange Netflow Total showed a massive drop in exchanges. A warning has been issued that a massive liquidation is imminent, but this is unlikely to happen until liquidity levels are near $2,020.
Ethereum price climbed to a high of $2,030 on Saturday 12/8 before beginning its predicted decline. Ethereum price is currently trading at $1687 as the bears successfully broke the 8-21 day moving average. There could be a retreat in the broken lockdowns over the weekend. However, auction market theory would suggest a return to the $1,571 and $1,450 liquidity levels, which is highly likely to occur. The volume profile indicator confounds the bearish outlook as the 1-hour timeframe has seen an increasing influx of selling pressure.
BTC/USDT 1 hour chart
The safest invalidation of the downtrend scenario is for the bulls to make a second attempt at the $2030 levels. However, risk-taking bulls might try to take a knife in the $1370-$1420 range with a void of $1270 in the coming days. The pullback target could go as high as $1,984.
In the video below, our analysts dive deep into Ethereum price action and analyze the key levels of interest in the market. – the FXStreet team