2021-07-11 01:00:00

ETH teases rising channel breakdown, eyes deeper losses below $2000

  • The ETH sellers remain in control starting out a fresh week.
  • Ethereum weighs in Elon Musk’s tweet and Fed’s concerns on crypto assets.
  • The no.2 coin at risk of a rising channel breakdown on the 12H chart.

Amid the absence of weekend love, the most widely trading crypto assets are extending last week’s sluggish momentum starting out a fresh week on Sunday.

Elon Musk’s, Tesla Inc.’s founder, warning against Bitcoin and Ethereum, suggesting that their transaction rate was “slow” and cost “high”, remains a weight on the no. 2 coin.

Meanwhile, the US Federal Reserve (Fed), for the very first time, flagged digital assets, in its semi-annual Monetary Policy Report to Congress released on Friday.

“The surge in the prices of a variety of crypto assets also reflects in part increased risk appetite,” the report added. This came as Bitcoin price is up some 250% from a year ago, although it is well down from its April high.

As of writing, ETH/USD is down 1% on the day, trading just shy of $2100. Ethereum is shedding nearly 10% over the past seven days.

ETH/USD: Risks remain skewed to the downside amid rejection above 50-SMA

Ethereum’s 12-hour chart shows that the price is challenging the rising trendline support at $2091, with a candlestick closing below that level likely to validate a downside breakout from a three-week-old rising channel formation.

Note that ETH price trades below all the major Simple Moving Averages (SMA) on the given time frame while the Relative Strength Index (RSI) points south below the midline, both of which suggest a likelihood for additional downside.

If the channel breakdown materializes then a drop towards the $2000 psychological level cannot be ruled. A sustained breach of the last could prompt a sharp sell-off towards the $1720-$1730 region, where the June 26 low aligns.  

ETH/USD: 12-hour chart

Alternatively, acceptance above the 50-SMA at $2120 is critical for the ETH bulls to aim for any meaningful recovery towards the mildly bearish 21-SMA at $2194.

Further north, the $2500 psychological barrier could be challenged once again.

All in all, the path of least resistance appears to the downside for Ethereum price.

ETH/USD: Additional levels to watch


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