Ethereum price starts to cave into selling pressure under $400.
ETH/USD path of least resistance is downwards but support is anticipated at $390.
Ethereum price for the first time in 2020 made it above $400 even beating the 2019 high around $361. A new yearly high was formed at $415.86 but marked the end of the magnificent bullish move. Due to high volatility witnessed at the beginning of August, a reversal took place sending Ether back to the support at $320 highlighted by the 50% Fibonacci retracement level taken between the last swing high at $415 to a swing low at $229.
From the beginning of this week, Ethereum has remained in the bullish hands but the price action has not been as rapid as seen in the last couple of weeks of July. Attempts to sustain gains above $400 have not yielded with Ethereum remaining pivotal at the same level.
In the meantime, ETH/USD is trading at $397 amid consolidation. The immediate upside is capped by the increasing seller congestion at $400. Moreover, a descending trendline is also in the way of upward price action.
A glance at various technical levels and indicators show that Ethereum is poised for continued downward action. For instance, the MACD features a bearish divergence of -1.59, mainly increasing the dominance of the sellers in the market.
ETH/USD 4-hour chart
The same bearish momentum is brought to light by the RSI currently at 58.36. Its downtrend shows that the momentum is becoming more and more bearish which means that it will be even harder to turn the price back above $400.
For now, the best the bulls can do is to establish support above $390 if not $395. This will allow for consolidation in a narrow range and push for gains above $400. The action above $400 would encourage more buying entries as the bulls push the price towards $500.
Luke has had a long interest in financial technology, especially cryptocurrency and blockchain. With a Bachelors degree in Journalism and Media, Luke is dedicating his writing skills for the digital currency sphere.He can be contacted at email@example.com