Ethereum (ETH) cryptocurrency rate is correcting after a powerful dump. However, the downtrend, most likely, is not over yet. Therefore, ETH/USD should drop in price to $ 3,300 by May 20.
On May 12, Ethereum price renewed its ATH, reaching $ 4,383 (Bitstamp data). However, the cryptocurrency began to be sold immediately after that. As a result of two impulses, the coin rate dropped by 19% – to $ 3,550. During the correction, the value of the asset rose to $ 4,036, but did not stay in the range above $ 4,000 and now stands at $ 3,983.
During the downward movement, the ETH price bounced off the 38.2% Fib recorded during the pump from $ 2,170 to $ 4,383. At the moment, the virtual currency rate exceeds 23.6% Fib. Thus, if the price holds above this mark, then Ethereum may rise in price to $ 4,300-4,500. Otherwise, we should expect the rate to fall to $ 3,300 (50% Fib).
Apparently, the pump from May 11 to May 12 was a bull trap. Buyers have specially updated the record value of the coin to lure traders to long. In the corridor from $ 4000 to $ 4380, there is an increased activity of bears. This fact indicates that this range represents a sales area. In this regard, the purchase of ETH above the $ 4000 level carries increased risks.
In May, a bearish divergence was observed on the ETH chart – the coin rate was growing, and the RSI index was falling. As a rule, this factor signals an upcoming dump.
The TD Sequential indicator, which accurately predicted the start of bearish trends in 2018 and 2019, speaks in favor of a reversal in the market. When its value on the weekly chart reaches 8 or 9 (now 8), there is a sharp decline in the Ethereum rate. In theory, a massive dump can occur at the end of May if the candles for this and next weeks turn out to be green.
Fear for the future of Ethereum is caused by the dynamics of the Bitcoin (BTC) exchange rate. On May 13, the father of cryptocurrencies updated the bottom at around $ 45,700.Since mid-April, BTC has been sliding into a hole and threatens to drag away all other digital assets with it. Wild shitcoin pumps, such as the recent surge of Shiba Inu by 1000%, occur at the end of the altcoin season. As a result, the likelihood of a global reversal in the crypto market increases.
4 hours MACD is in the bearish trend zone.
4 hours RSI is above 50 (in the neutral zone).
Major Support Level – $ 3,550.
Major Resistance Level – $ 4,300.
The nearest pivot points are $ 3,621 and $ 4,291.