The Impact of Market Conditions on Ether’s Price
As the world’s second-largest cryptocurrency by market capitalization, Ether (ETH) has experienced a sharp decline in price, trading near a two-month low. This drop is part of a broader sell-off across the asset class, driven by concerns that the market could soon be flooded with additional Bitcoins from the defunct Japanese exchange Mt. Gox. In addition, Ether has seen intensified selling due to long position liquidations totaling nearly $180 million over the past two days, marking the highest two-day period of forced sales since mid-April.
Breaking Down Recent Price Movements
Since reaching its peak in early March, Ether has been rangebound between $3,900 and $2,900, establishing key support and resistance levels. However, the cryptocurrency recently broke below the closely watched 200-day moving average, with prices accelerating below $2,900 on Friday morning.
Monitoring Key Price Levels
Despite the bearish momentum confirmed by the relative strength index (RSI) reading below 30, the deeply oversold conditions suggest a potential short-term bounce at critical chart levels. The first area to watch is around $2,600, which may provide support near a previous peak in January during Ether’s uptrend from October to March.
If prices fall below $2,600, the next support level to monitor is around $2,150, where a horizontal line connects prices from November to early January. A further retracement could push Ether below the key psychological level of $2,000 to $1,950, where buyers are likely to emerge based on historical price movements.
Recovery and Potential Selling Pressure
In the event of a price recovery, it’s essential to keep an eye on the prominent March and May peaks at $4,094 and $3,974, respectively. These levels on the chart could pose significant overhead selling pressure for Ether as it attempts to regain lost ground.
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