There has been a reversal in the Ethereum (ETH) cryptocurrency market. Therefore, we are working on short positions and are waiting for the coin rate to fall to $ 2,000 by May 27.
Ethereum rate began to dump on May 12 after reaching the highest price indicator in history ($ 4,381 on Bitstamp exchange). By Monday, ETH/USD fell by 23%, and the value of the cryptocurrency began to change in the corridor from $ 3,100 to $ 3,600. However, the bulls did not seize control of the market, and on Wednesday there was the most powerful dump since March 2020. In 12 hours, ETH lost 47% in price: from $ 3,458 to $ 1,847.
As result, ETH value broke through the resistance (indicated on the chart in red) and support (green) lines of the upward trend that arose in March of this year. The rate of the coin pushed off from $ 1,847, flew to $ 2,946, and began to fall again. Most likely, the Ethereum price will be locked between these two lines. The upper border is at $ 2,912, the lower one is at $ 2,058. With a high degree of probability, ETH price will test the upper barrier again and then break the lower one.
ETH successfully completed the mission called “to the moon” because the asset’s rate has grown almost 43 times since March 2020 (from $ 86 to $ 4,381). Many analysts assumed that the coin’s high capitalization depreciates the dump at the end of a bull run. But this hypothesis has not been confirmed in practice. In 2018, ETH dropped by 45% as a result of the first impulse, and this year – by 58%. Therefore, in long-term planning, it is worth considering a scenario involving a drop in the ETH rate by 95% from the maximum – to about $ 200.
In 2018, the bottom was reached 11 months after the peak. The price bounced two Fibonacci levels from 50%, 38.2%, and 23.6%. This year, the rate has already bounced from 38.2% of the level, taking into account the dump from $ 4,381 to $ 200. If we draw an analogy, then we can assume that:
On May 18, it was revealed that CryptoFace, the creator of the Market Cipher indicator, told BitBoy Crypto YouTube author Ben Armstrong in a personal conversation: “When it’s May, walk away.” He meant that cryptocurrency should be sold in May. CryptoFace said that it got rid of all digital assets and has no plans to enter the market for now due to too high risks. CryptoFace did not explain how it learned the information about the impending dump. But it becomes clear that the coin drain was planned. In this regard, one should beware of bullish traps and not go long.
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