Ethereum has decline today alongside Bitcoin and the aggregated crypto market, breaking below a key support level that was previously being defended by buyers
It now appears that ETH could be well positioned to see even further downside in the days and weeks ahead
One technical indicator is forecasting that it will plunge to $200 before it is able to garner any notable buying pressure
This could lead it to break below a key support level, and catalyze a far-reaching downtrend
Prior to yesterday evening, Bitcoin, Ethereum, and the aggregated crypto market had been caught within a consolidation phase that persisted for many weeks.
Although the overnight decline seen by most major cryptocurrencies did cause them to shatter the lower boundaries of these consolidation channels, it is important to note that buyers have still defended several key levels.
In the case of Etheereum, although the crypto was previously flashing some signs of immense strength, its dependence on Bitcoin has made it prone to the weakness seen by the entire crypto market today.
That being said, one technical indicator is now suggesting that it will continue plunging until it reaches $200.
This would force it below a key support level, and potentially kick off a notable downtrend in the weeks ahead.
Ethereum Declines Alongside Entire Crypto Market; Key Support Fast Approaches
At the time of writing, Ethereum is trading down just under 6% at its current price of $222.65. It has been flashing some intense signs of weakness throughout the past 12 hours, as it has also declined by over 2% against its Bitcoin trading pair.
It does appear that this weakness will extend further in the near-term, as this latest decline forced it below $230 – the level that marked the lower boundary of its previous trading range.
One analyst also explained that $215 is an important level for it to maintain above. This happens to be around the point at which it was finding significant resistance throughout most of May – as seen in the below chart.
Image Courtesy of Cold Blooded Shiller. Chart via TradingView
Here’s Why ETH Could Soon Reel Towards $200
There is one respected technical indicator that suggests Ethereum is poised to post a notable decline in the days and weeks ahead.
Another prominent analyst spoke about this technical indicator in a recent tweet, explaining that it shows ETH is likely to reel towards $200 before finding any notable support, while also showing that Bitcoin could soon hit $8,500.
“BTC and ETH Cloud pretty clear on targets here. 8.5 and 200. Another way to think of this: HH less probable than retrace/mean reversion,” he explained while pointing to the below chart.
Image Courtesy of Josh Olszewicz. Chart via TradingView
How Ethereum trends in the days ahead should provide valuable insights into just how much technical damage was done by its recent price decline.
Featured image from Shutterstock.
Charts from TradingView.