Ethereum dropped as much as 3,299 today registering a new low. Now, it's trading at 3,445.66 at the time of writing. The crypto is fighting hard to rebound and recover after its massive drop. ETH/USD registered a 14.02% drop from 3,837.01 yesterday's high to 3,299 today's low.
Yesterday, I told you that the altcoins could drop if the price of Bitcoin extends its sell-off. Ethereum increased a little, but the overall bias remains bearish. In the short term, it could only test and retest the immediate resistance levels before resuming its bearish movement.
ETH/USD Strong Sell-Off!ETH/USD failed to reach and retest the downtrend line signaling strong selling pressure. Dropping below 3,640.60 signaled deeper drop. As you can see on the H4 chart, the crypto has found support on the weekly S2 (3,303.37) failing to reach the median line (ML).
The price reboundd and now it tries to retest the 3,470.02 and the 61.8% retracement level. the bounce back could be only a temporary one. If it continues to stay under these levels, ETH/USD could come back down towards today's low. Also, as long as it stays under the downtrend line, the bias remains bearish despite any temporary rebound.
Ethereum Outlook!The new lower low registered today signals strong selling pressure. After its massive drop, a temporary rebound was natural. It could extend its drop anytime as long as it stays under the 61.8% (3,500.24) level. Technically, a rebound towards the immediate upside obstacles (former support levels) could bring new selling opportunities.
Personally, I would like the price to reach the median line (ML) of the descending pitchfork before deciding its next move. A bullish pattern on the median line could bring new long opportunities. A valid breakdown through may announce a larger drop. Also, failing to reach the median line (ML) followed by a strong sideways movement could announce a potential leg higher.