Ethereum suffered under the impact of an ascending channel, shattering support areas at $360 and $340.
ETH/USD is only taking a breather at $340 because signals remain bearish amid calls for $300.
The smart contracts token has been on a downward roll following the rejection suffered slightly above $390 towards the end of last week. Tentative support at $380 and $360 failed to come to the rescue of the bulls as the bears extended the leg below $340. Ether tested the short term support at $330 before recovering slightly to the prevailing market value of $341.
The losses have not been unique to Ethereum as Bitcoin and most of the altcoins revisited lower support areas on Monday. The pioneer cryptocurrency dipped under $10,500 only to find support above $10,400. The majority of cryptocurrencies in the market are wallowing in red rough waters as buyers race to mitigate the losses.
Looking at the 4-hour chart, which illustrates the impact of an ascending triangle breakdown, we can tell that Ethereum is not done with the downside. There is a possibility the lower leg will retest support at $310 and $300 before formidable recovery can be staged.
ETH/USD 1-hour chart
The bear ish scenario is validated by the Relative Strength Index (RSI). The indicator is currently stuck in the oversold. The longer the RSI stays under 30, the stronger the bearish grip becomes. Note that the 50 Simple Moving Average aborted the mission to cross above the 100 SMA in the 4-hour range, hence signaling for more sell orders. If the gap made by the 50 SMA under the 100 SMA continues to widen, I can expect Ether to hit lower levels at $310 and $300 in the near term.
Ethereum holder distribution
The bearish case is also confirmed by the whales currently selling as per the data provided by Santiment. Whales holding between 10,000 and 100,000 ETH fell from 161 on September 18 to 159 on September 22. In the same period whales holding between 100,000 to 1,000,000 ETH fell from 972 to 971. The large volume holders keep putting selling pressure on Ethereum, increasing the potential of refreshing lower areas at $310 and $300, respectively.
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