Ethereum is still struggling after the initial market crash on October 10 that rocked the market. The ensuing market decline took the largest altcoin by market cap to near $3,000, falling below it for the first time earlier in the week. A dead count bounce will occur as the price is trying to find support, which could cause the price to rise by more than 10%. However, the target remains significantly lower as the dead count rebound ultimately turns bearish.
Why Ethereum may fall
In a recent analysis, crypto analyst TradingShot outlined how the Ethereum price has been in a bearish trend since early October. This first started after the altcoin hit a new all-time high of just over $4,900, and was hit hard by the market-wide crash on October 10th.
Since then, digital assets have been channeled down. This channel down triggered a double-digit decline in altcoins since then. As explained by crypto analysts, since this trend was established, Ethereum price has fallen 27.50% in both bearish legs.
However, the tide has turned a bit recently after the price dropped below $3,000. This happened after Ethereum formed a higher low on the RSI for the day. In most cases, this is bullish for crypto prices, but the problem is that it is likely to be only so in the short term.
If the bullish divergence plays out as expected, Ethereum price will definitely be set for some recovery. TradingShot believes this recovery could push the ETH price up by 10% to $3,400 before the bears intervene again.
However, the overall trend remains bearish, which could be an obstacle to recovery. We expect the decline to resume if the bears mount enough resistance to keep the rally on track. If this is done, it could mean that recovery is nothing more than a dead cat bounce.
This $3,400 level is located at the 1-day MA50. This is important because it was the rejection point on October 27th. Last time it caused a 27.50% crash in Ethereum price. Cryptocurrency analysts believe that if the decline starts again this time, this could trigger a sharp fall below $3,000.
This period spans from the end of November to the beginning of December and runs for just two weeks. This selloff is expected to send Ethereum down to $2,650 before finding a bottom and setting a new low.
Featured image from Dall.E, chart from TradingView.com
