Cryptocurrency Analysis

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Ethereum broke through $3,000 and continues to decline: why is it good

After a powerful rally to $3,300, Ethereum begins to lose ground and decline. Today, August 19, the cryptocurrency broke through an important support level at $3,000 and as of 13:00 UTC, it is quoted at $2,900. At the same time, the coin has not yet exhausted its margin of safety, and bullish signals are visible on technical indicators, which the market is not in a hurry to implement yet. And this is good since, at the current stage, ether needs to pause to continue a healthy price rally above the $3,300 mark.

The main problem of ETH at this stage is the increasing discrepancy between trading volumes and price growth. This circumstance indicates certain unreasonableness of the rapid growth of the quotes of the altcoin. And unlike bitcoin, ether failed to correct the situation. The same applies to the on-chain indicators of the cryptocurrency. After the hype from the hard fork subsided, the coin began to lose its audience, but the price continued to move up. This discrepancy was partially offset by the fact that the recent rally of the asset was caused by the operations of institutional investors, while the retail audience remained distrustful. All these factors were not decisive, but raised concerns about the validity of the ETH rally. Given this, the market correction of the asset looks like a very useful tool for eliminating these discrepancies.



At the same time, it is absolutely obvious that the market has not yet exhausted the current reserve of interest in the altcoin. Firstly, this is evidenced by the activity of unique addresses that defended their positions and showed interest in purchases. In addition, the supply of ETH on the main cryptocurrency exchanges continues to decrease, which also indicates the interest of market participants. Also, this reduces the pressure of sellers on the asset, which confirms the fact that the correction of the ether is of a technical and health-improving nature. It also adds positive indicators of the seven-day MVRV, which remains in the negative zone and indicates the continued growth of interest in the cryptocurrency. It also indicates that there is no prospect of profit-taking, which could worsen the fall of the altcoin.



The interest in altcoin is also clearly visible on the one-hour chart. Buyers have already started buying off the price and are trying to return the asset above $3,000. Stochastic indicates a likely bullish breakout, but the RSI remains below the 50 mark. At the same time, the MACD indicates the continuation of consolidation and sideways movement. The four-hour chart shows more signals to weaken, but the tendency to enter $3,000 is still strong.



The daily chart shows the formation of powerful bullish signals, which can increase many times over if the ether manages to jump by $3,000 by the end of the day. At the moment, the situation around the quotes of the ETH/USDT pair is stable. The correction is of a technical nature and, most likely, tomorrow the altcoin will return to growth. A small drop in price will allow the asset to close the difference in price and on-chain indicators, which will strengthen the future rally.






Artem Petrenko
Analytical expert
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