Ethereum - ETHUSD update

Since 14th August 2022, Ethereum has declined more than 20%, while at some point reaching almost 30% decline. That is an abrupt loss of ⅓ of Ethereum's value within merely two weeks. However, it comes to us as no surprise because on 15th August 2022, we warned about a 50% decline in the price of Ethereum. So far, half of the move has materialized, yet, we are still waiting for the remaining part of the decline.

Our view is supported by fundamental factors concerning high-interest rates, economic tightening, and a slowing global economy. Due to that, we will pay close attention to the upcoming FED meeting, which in our opinion, will further weaken the economy. As a result, we think risk aversion will rise and lead to a sell-off in the cryptocurrency market.

Meanwhile, technical factors also support our bearish outlook, with many indicators flashing warning signs. For example, moving averages confirm the presence of the downtrend across daily, weekly, and monthly time frames. Simultaneously, RSI, MACD, and Stochastic are bearish across those same time frames. These developments are very bearish, forecasting trouble for ETHUSD over the rest of 2022.

We dismiss any speculation about the “uber-bullish” effect of Ethereum's upcoming merge as nonsense. Although, we do not rule out temporary price bounce. Despite that, we stick to our bearish predictions with price targets at 1 000 USD and 900 USD.

Illustration 1.01
Illustration 1.01 shows the daily chart of ETHUSD and the bearish crossover between 20-day SMA and 50-day SMA; the crossover confirms our bearish thesis.

Technical analysis - daily time frame
RSI, Stochastic, DM+, and DM- are all bearish. MACD is neutral. Overall, the daily time frame is bearish.

Illustration 1.02
Illustration 1.02 shows the weekly chart of ETHUSD. It also portrays 20-week and 50-week SMA, which remained intact (in a bearish constellation) during the recent bear market rally. Indeed, the natural retracement toward the 20-week SMA represented a strong downtrend correction.

Technical analysis - weekly time frame
RSI, Stochastic, MACD, DM+, and DM- are all bearish. Overall, the weekly time frame is bearish.

Illustration 1.03
The picture above shows simple support and resistance levels for ETHUSD.

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.