In our last Ethereum analysis using the Ichimoku cloud indicator, we warned traders that Ethereum was vulnerable to a move lower towards $3,500 and lower. Ethereum has provided us with several signs of weakness and is following our plan for a move lower.
Red line - resistance
Ethereum initially broke below the blue upward sloping support trend line providing us with the first sign of weakness. At the same time price was breaking below the Kumo (cloud) support providing an added bearish signal. In our previous analysis we warned that the rejection at the cloud resistance was another bearish sign and as long as price was trading below the red trend line, we remained pessimistic and a move towards $3,500 and lower was justified. Short-term trend is bearish and this is also confirmed by the fact that price is below the Kumo (cloud). More downside is expected.