Ethereum’s weakness as of late has primarily been rooted in that seen by Bitcoin.
From a fundamental perspective, the cryptocurrency is arguably at one of its strongest points ever, with daily transactions recently breaking 1 million while its userbase sees massive growth.
This strength has not translated into positive price action yet, as all of the profits within the Ethereum ecosystem have been limited to the booming DeFi sector.
It is a strong possibility that some of these profits will cycle into ETH, but it remains unclear as to how long it might be before this takes place.
In the near-term, analysts do believe Ethereum is positioning to see further weakness as it continues underperforming Bitcoin.
One analyst is even noting that a break below the crucial support that it is currently hovering above could be all that is needed to send it reeling to below $170. This decline could come about in the next few days if buyers continue losing their strength.
Ethereum Has Yet to Enter a Downtrend Despite Recent Losses
At the time of writing, Ethereum is trading up roughly 2% at its current price of $225, marking a notable climb from recent lows of $220 that were set at the bottom of yesterday’s selloff.
This movement came about in tandem with that seen by Bitcoin. The benchmark crypto plunged to lows of $8,900 yesterday before finding some buying pressure that helped guide it back into its multi-week trading range.
Ethereum, however, has been trading below its range for the past several days and has not been able to break back into it despite the upwards momentum stemming from yesterday’s rebound.
This is an overtly bearish sign that demonstrates how ETH has been underperforming BTC over the past few days.
The crypto’s Renko chart is now indicating that it has still yet to enter a downtrend despite its recent losses.
A few key indicators on the chart also indicate that the next movement will be large and may favor bears. One analyst spoke about this in a recent tweet, saying:
“12h divergence on ETH. They don’t occur too often but have always been strong signals. A ‘play out’ of the divergence only happens on a cross of the Oscillator. So basically, we’ve not begun the downmove yet.”
Image Courtesy of Crypto Michael. Chart via TradingView
Why ETH Could Soon Nosedive to $168
Another analyst echoed this bearish sentiment, explaining that although the crypto is holding above its key support, it could still see some notable downside if buyers fail to continue defending it.
He contends that it will target $250 if this support holds, and $168 if it falters.
“Ethereum: Still on the road and at support. Previous OB and Resistance being tested as support and currently holding. Holding = new test of $250 and likely breakout towards $290 / $330. Losing = test around $168-173.”
Image Courtesy of Crypto Michael. Chart via TradingView
Featured image from Shutterstock. Charts from TradingView.
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