September 22, 2020
By Benson Toti
As BTCUSD holds the $10,000 level, the second-largest cryptocurrency Ethereum looks to follow suit with bulls defending the key area around $330.
Over the past 24 hours, the Ethereum token has faced huge volatility amid heavy selling to see prices slip nearly 13% since the start of the day Monday. Overall, ETH/USD is almost 17% down over the past two days.
Although the price has bounced off a key level, the scenario remains that the token could yet slip to lows of $300. And according to one analyst, further downward action below this level risks a retest of the major support zone around $250.
Ethereum’s price struggles mirror the bleeding seen among major altcoins following Bitcoin’s dip. The cryptocurrency also felt the heat from a crashing stock market that has failed to sustain growth since Black Thursday.
According to Santiment, the correlation between Ethereum, Bitcoin, and traditional assets has hit levels never seen before. It is such a scenario that could likely see Ethereum bulls find it difficult to break above $380.
According to IntoTheBlock’s In/Out of the Money Around Price (IOMAP) metric, the area represents more than 1.41 million addresses that account for over 14 million Ether tokens. Seller congestion around this area had been charted by one prominent crypto trader before markets began to shrink on Monday.
Cryptocurrency trader and analyst Michael Van de Poppe pointed out that ETH/USD was likely to find huge resistance around $385 and that the extended range-bound trading could easily turn bearish with prices dropping to the $280-$250 range.
As shown in the chart below, if the Ethereum price fails to rally above $356, bears will likely look to cause damage. The next support area if bulls fail to retake $356 is around $321 and below that is the psychological $300 mark.
If the correction holds, a breakdown could mean bulls must defend the area around $270. The area has a massive buffer zone around $290 where over 1.01 million addresses purchased more than 2.52 million tokens.
This area is currently “in the money,” and according to IntoTheBlock’s IOMAP data, provides a crucial support area likely to withstand massive selling pressure.
As of writing, ETH/USD is swapping hands around $340, still more than 7% lower in day-to-day trades despite a slight upturn in fortune during the late Asian trading session.