Ethereum is dropping like a rock at the time of writing. It's trading at 4,389.77 far below 4,556.42 yesterday's high. In the short term, it has reached a strong dynamic resistance, so a temporary decline was somehow expected.
ETH/USD dropped by 3.75% from 4,555.25 today's high to 4,383.99 today's low. The crypto drops as the price of Bitcoin turned to the downside. Ethereum could test and retest the near-term support levels before trying to jump higher.
ETH/USD registered a false breakout through the descending pitchfork's upper median line (UML) and now it has turned to the downside. The bearish engulfing signaled a potential drop.
Now, it challenges the weekly pivot of 4,331.69 and the 23.6% retracement level. Unfortunately, it has failed to stabilize above 4,439.92 signaling that the pressure is high. The median line (ML) of the descending pitchfrok stands as a dynamic support.
Only a valid breakout through the upper median line (UML) could announce an upside continuation.
Dropping and stabilizing under the descending pitchfork's median line (ML) could signal a deeper drop towards the 38.2% retracement level. A larger corrective phase could be activated by a valid breakdown below the 38.2% and under the 4,000 psychological level.
On the other hand, staying above the median line (ML), testing and retesting this dynamic support, or registering only a false breakdown could signal that ETH/USD could still grow.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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