ETH targets $1600 on a daily closing below 100-day SMA

  • Ethereum sellers remain in control as China’s cryptos crackdown continues to weigh.
  • The No. 2 coin needs a daily close below 100-day SMA to extend the downside.
  • Acceptance above $3000 could offer temporary respite to the ETH bulls.  

The nightmare for the crypto markets appears far from over, as the bearish sentiment around the world’s second widely traded digital coin, Ethereum, remains intact.

After Wednesday’s flash crash, the ETH bulls attempted a relief rally and reversed almost half the previous slump on Thursday. However, sellers returned on Friday after yet another blow from China.

China’s Vice Premier Liu He vowed a “crackdown on bitcoin mining and trading behavior” as part of broader efforts to guard against financial risk. This follows early Wednesday’s statement from Chinese regulators, warning financial institutions about accepting cryptocurrencies as payment or offering related services and products.

In the mid-week bloodbath, Ethereum lost almost 30% at a point during the crash and hit the lowest in a month at $1895. Since then ETH/USD recovered to the $3000 mark but faced rejection at that psychological level. On Friday, Ethereum eroded nearly 20% of its value once again to test the $2100 threshold before finishing the day below $2450.

ETH/USD: Risks remain skewed to the downside amid a bearish technical setup

Ethereum’s daily chart shows that the price is flirting with the 100-day simple moving average (SMA), now at $2264, having failed to recapture the $2500 level.

ETH/USD: Daily chart

It’s worth noting that the ETH bulls have been successful in defending the 100-day SMA support so far this week, despite the worst crash witnessed since March 2020.

Therefore, if the price closes Saturday below that critical support, a fresh downswing towards Wednesday’s low of the horizontal (orange) trendline support near $2050 cannot be ruled out.

Acceptance below the last could expose Wednesday’s low of $1895. The next stop for the bears is envisioned at the all-important 200-day SMA at $1573.

The 14-day Relative Strength Index (RSI) also backs the case for an additional downside, as it points south below the midline. The leading indicator is approaching the oversold territory, currently trading at 36.31.

Alternatively, if the 100-day SMA support holds, the ETH bulls could gather strength to challenge the horizontal 50-day SMA resistance at $2783.

Further north, the $3000 psychological barrier could be challenged once again. A daily closing above that level is needed for any meaningful recovery momentum, which could bring the mildly bearish 21-day SMA resistance at $3404.

ETH/USD: Additional levels to watch

 

This news is republished from another source. You can check the original article here

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