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TA: Ethereum Dives 15%, Why Close Below $2K Is The Key

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TA: Ethereum Dives 15%, Why Close Below $2K Is The Key

Ethereum gained bearish momentum below $2,000 against the US Dollar. ETH even traded below $2,000 and remains at a risk of more losses.

  • Ethereum started a fresh decline below $2,100 and $2,000.
  • The price is now trading below $2,100 and the 100 hourly simple moving average.
  • There was a break below a key bullish trend line with support near $2,250 on the hourly chart of ETH/USD (data feed via Kraken).
  • The pair could continue to move down if there is a close below the $2,000 support.

Ethereum Price Breaks $2K

Ethereum failed to extend the recovery wave above the $2,400 level. ETH started another decline and traded below the $2,320 support zone.

There was a break below a key bullish trend line with support near $2,250 on the hourly chart of ETH/USD. The pair tumbled below the $2,200 and $2,100 levels. Ether price even broke the $2,000 support zone and settled below the 100 hourly simple moving average.

It traded towards $1,950 and is currently showing signs of more losses. If there is a recovery wave, the price might face resistance near the $2,050 level.

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The 23.6% Fib retracement level of the recent decline from the $2,451 swing high to $1,939 low is also near $2,060. The first major resistance is near the $2,150 level. The main resistance is now forming near the $2,220 level.

Source: ETHUSD on TradingView.com

The 50% Fib retracement level of the recent decline from the $2,451 swing high to $1,939 low is also near $2,200. A close above the $2,200 level could open the doors for a decent increase. In the stated case, ether price might rise towards the $2,350 resistance.

More Losses in ETH?

If ethereum fails to recover above the $2,200 resistance, it could continue to move down. An initial support on the downside is near the $1,940 zone.

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The next major support is near the $1,880 level. A daily close below the $2,000 level might spark more losses below $1,880. In the stated case, the price could dive towards the $1,700 level. The next major support might be near the $1,550 and $1,500 levels in the near term.

Technical Indicators

Hourly MACDThe MACD for ETH/USD is now gaining momentum in the bearish zone.

Hourly RSIThe RSI for ETH/USD is well below the 40 level.

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Major Support Level – $1,880

Major Resistance Level – $2,200

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ETH

TA: Ethereum Forms Bullish Pattern But This Level Is Crucial

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TA: Ethereum Forms Bullish Pattern But This Level Is Crucial

Ethereum extended decline and tested the $1,920 support against the US Dollar. ETH is rising and might revisit the key $2,085 resistance zone.

  • Ethereum remained stable above the key $1,920 support zone.
  • The price is now trading above $2,000 and the 100 hourly simple moving average.
  • There was a break above a major bearish trend line with resistance near $1,980 on the hourly chart of ETH/USD (data feed via Kraken).
  • The pair could rise further, but the $2,085 zone presents a major hurdle.

Ethereum Price Recovers Above $2K

Ethereum extended decline after it broke the $1,950 support and the 100 hourly simple moving average. However, the bulls took a strong stand near the $1,920 support.

A low was formed near $1,911 and the price started a recovery wave. There was a clear move above the $1,950 and $1,960 resistance levels. Ether price climbed above the 50% Fib retracement level of the downward move from the $2,083 swing high to $1,911 low.

Besides, there was a break above a major bearish trend line with resistance near $1,980 on the hourly chart of ETH/USD. Ether price is now trading above $2,000 and the 100 hourly simple moving average.

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The price is now facing resistance near the $2,020 level. It is near the 61.8% Fib retracement level of the downward move from the $2,083 swing high to $1,911 low. The next major resistance is near the $2,040 level. The main resistance is now forming near the $2,085 level. A close above the $2,085 level could open the doors for a steady increase.

Source: ETHUSD on TradingView.com

In the stated case, ether price could rally towards the $2,200 resistance. Any more gains may perhaps send it towards the key $2,250 resistance zone.

Fresh Decline in ETH?

If ethereum fails to recover above the $2,400 resistance, it could start a fresh decline. An initial support on the downside is near the $1,995 zone and the 100 hourly SMA.

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The next major support is near the $1,970 level. A downside break below the $1,970 level might call for another test of the main $1,920 support. Any more losses may perhaps clear the path for a sharp decline to $1,800.

Technical Indicators

Hourly MACDThe MACD for ETH/USD is now losing momentum in the bullish zone.

Hourly RSIThe RSI for ETH/USD is now above the 50 level.

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Major Support Level – $1,970

Major Resistance Level – $2,085

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Bitcoin

Investors May Expect Downside For Bitcoin And Ethereum Market For The Next 3 Months

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Investors May Expect Downside For Bitcoin And Ethereum Market For The Next 3 Months

The crypto markets have accepted the depegging of UST and the subsequent downward spiral of LUNA, both of which impacted the price of Bitcoin and the entire digital asset spectrum. According to a recent report by the Glassnode team, the Bitcoin market has been trading lower for eight weeks, making it the ‘longest continuous series of red weekly candles in history.’

Even Ethereum, the most popular altcoin, painted a similar picture. Bearish fluctuations damage returns and profit margins directly or indirectly.

To make matters worse, derivative markets forecast shows more declines in the coming three to six months.

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Derivative Markets Hint At More Pain For Bitcoin

According to derivative markets, the prognosis for the next three to six months remains fearful of further fall. On-chain, the report stated that blockspace demand for Ethereum and Bitcoin has dropped to multi-year lows, and the rate of ETH burning via EIP1559 has reached an all-time low.

Glassnode calculated that the demand side will continue to face headwinds due to poor price performance, uncertain derivatives pricing, and extremely low demand for block-space on both Bitcoin and Ethereum.

The report explains:

Looking on-chain, we can see that both Ethereum and Bitcoin blockspace demand has fallen to multi-year lows, and the rate of burning of ETH via EIP1559 is now at an all-time-low.

Coupling poor price performance, fearful derivatives pricing, and exceedingly lacklustre demand for block-space on both Bitcoin and Ethereum, we can deduce that the demand side is likely to continue seeing headwinds.

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Both Bitcoin and Ethereum’s price performance over the last 12 months has been disappointing. Long-term CAGR rates for Bitcoin and Ethereum have been impacted as a result of this.

Source: Glassnode

BTC, the largest cryptocurrency, moved in a roughly 4-year bull/bear cycle, which was frequently accompanied with halving events. When looking at long-term returns, the CAGR has dropped from almost 200 percent in 2015 to less than 50 percent as of this writing.

Related Reading | New Data Shows China Still Controls 21% Of The Global Bitcoin Mining Hashrate

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Furthermore, Bitcoin had a negative 30% return over the short term, implying that it corrected by 1% every day on average. This negative return for Bitcoin is very similar to prior bear market cycles.

Source: Glassnode

When it comes to ETH, the altcoin performed far worse than BTC. Ethereum’s monthly return profile revealed a depressing picture of -34.9 percent. Ethereum likewise appears to be seeing diminishing rewards in the long run.

Furthermore, during the previous 12 months, the 4-year CAGR for both assets has dropped from 100% to only 36% for BTC. Also, ETH is up 28 percent per year, emphasizing the severity of this bear.

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To make matters worse, the derivative market warned of future market declines. Near-term uncertainty and downside risk continue to be priced into options markets, particularly over the next three to six months. In reality, during the market sell-off last week, implied volatility increased significantly.

Total crypto market cap stands at $1.2 Trillion. Source: TradingView

The Glassnode analysis concluded by stating that the present bear market has taken its toll on crypto traders and investors. Furthermore, the Glassnode team emphasized that downturn markets frequently worsen before improving. However, ‘bear markets do have a tendency of ending’ and ‘bear markets author the bull that follows,’ so there is some light at the end of the tunnel.

Related Reading | TA: Bitcoin Price Stuck In Key Range, Why Dips Might Be Limited

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Featured image from iStockPhoto, Charts from Glassnode, and TradingView.com

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ETH

How Ethereum’s Uniswap Reached A Milestone Of $1 Trillion In Trading Volume

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How Ethereum’s Uniswap Reached A Milestone Of $1 Trillion In Trading Volume

Popular decentralized exchange (DEX) platform on Ethereum, Uniswap, celebrates a major milestone. Via its official Twitter account, the team behind the protocol announced that it has processed $1 trillion in all-time trading volume.

Related Reading | Coinbase Is on a Downwards Spiral and Could Be Taking your Crypto with It

As seen below, this metric has been on an uptrend since September 2020. At that time, the protocol processed less than $10 billion in cumulative trading volume.

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The $1 trillion milestone was reached in less than a year as Uniswap went processing around $250 billion in cumulative trading volume to $750 trillion in March 2022. The metric has been on the rise despite the current downtrend across global markets.

Source: Uniswap Labs via Twitter

The team behind Uniswap stated the following:

It’s been one hell of a ride. As of today, the Uniswap Protocol has passed a lifetime cumulative trading volume of $1 Trillion (…). We couldn’t have reached this milestone without the Uniswap community that continues to build alongside us. Here’s to the next Trillion.

Additional data provided by the team behind the protocol suggest Uniswap’s popularity has been increasing along with its trading volume. The DEX’s market share surpassed 50% in August 2020 and has reached over 60% since that time.

In addition, the number of Uniswap Users recently hit almost 4 million. In January 2021, the metric stood at less than 1 million users. This represents a 4x increase in a little over a year. The inventor of Uniswap, Hayden Adams, added:

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$1 trillion all-time volume. I don’t tweet milestones as often these days, but four commas blows my mind. Never expected Uniswap to grow the way that it has. Thanks to everyone who has been along for the ride.

What’s Behind This Ethereum DEX Success?

There are three potential events that have resulted in Uniswap’s increase in market share and popularity. The first in the deployment of its second iteration, Uniswap v2 introduced new features and functionalities replicated across the entire DeFi sector.

The second is the launch of its governance token, UNI. The token rolled out around September 2020, when Uniswap’s fundamental began their upwards ascend, and it was airdropped to all users that ever interacted with the protocol.

The event marked an inflection point in the adoption of DeFi protocols. The next year, the sector boomed with the introduction of non-fungible tokens (NFTs) into the mainstream and more people onboarding it.

Source: Uniswap Labs via Twitter

The third event was the launch of DEX’s third iteration, Uniswap v3. This version offered more rewards to users with active investment strategies.

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Today, most blockchain networks can’t exist without a DeFi sector and their own version of Uniswap. Despite its popularity, the DEX and other protocols have been affected by the current downside price action across large cryptocurrencies.

Data from Token Terminal suggests Uniswap peaked in September 2021 when its total value locked (TVL) was close to $10 billion and its trading volume followed. Ever since then, this metric has been in a downtrend and currently appears to be consolidating.

Related Reading | TA: Bitcoin Price Stuck In Key Range, Why Dips Might Be Limited

At the time of writing, UNI’s price stands at $5.57 with a 5.5% loss in the last 24-hours.

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UNI trends to the downside on the 4-hour chart. Source: UNIUSDT Tradingview

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