Ethereum’s 2020 uptrend allowed ETH to forge a firmly bullish market structure that many analysts had expected to catalyze a massive parabolic rally. This bullish possibility is now at risk of being invalidated, however, as the crypto was rejected overnight at a key level.
At the moment, ETH is firmly tracking Bitcoin and the aggregated crypto markets, which means that its next big movement will likely depend on where BTC goes next.
In the near-term, it is highly probable that Ethereum will see some significantly further downside, as the cryptocurrency was rejected at a critical resistance level.
Ethereum Fails to Hold Above $190 as Crypto Markets Face Widespread Downturn
At the time of writing, Ethereum is trading down just under 2% at its current price of $188, which marks a notable decline from its daily highs of roughly $195 that were set overnight.
ETH tapped these levels when it incurred a massive flash rally overnight that nearly instantly led to a firm rejection, which came about in tandem with BTC’s sharp rise to over $9,600 that similarly resulted in a strong rejection.
Analysts are now expressing some short-term bearishness when it comes to ETH, with CryptoGainz telling his followers that he believes the crypto will soon see a sharp pullback to a minimum of $180.
“This looks like a retest of the top of the range getting rejected on ETH. And it just sfp’d clearing out highs. I’m not great with pullback targets but 180$ at minimum,” he explained.
This looks like a retest of the top of the range getting rejected on $eth
And it just sfp’d clearing out highs
I’m not great with pullback targets but 180$ at minimum pic.twitter.com/5nVWRxPmlr
— CryptoGainz (@CryptoGainz1) February 3, 2020
It is important to note that if ETH does see short-term pullback to these levels, it will have erased only roughly two days of gains.
Failure to Break Above $195 Could Mean Massive Losses Are Imminent
$195 appears to be a critical resistance level for Ethereum over the past several years, with breaks above this level catalyzing parabolic gains, and dips below it leading it to capitulate.
HornHairs, another well-respected cryptocurrency analyst on Twitter, spoke about this level in a recent tweet, explaining that the importance of ETH’s reaction to this level should not be taken lightly.
“Alright let’s go ahead and establish how important of a level this is here for ETH… We’ve seen moves to ATH from this spot and then moves to cycle lows after it has been broken. All that to say, this level is not to be taken lightly when price finds itself against it,” he explained while pointing to the below chart.
Alright let’s go ahead and establish how important of a level this is here for ETH…
We’ve seen moves to ATH from this spot and then moves to cycle lows after it has been broken.
All that to say, this level is not to be taken lightly when price finds itself against it. pic.twitter.com/HO1Ktve3Pu
— HornHairs 🌊 (@CryptoHornHairs) February 3, 2020
The coming few days and weeks should elucidate whether Ethereum will be able to surmount this level, or if the firm rejection it faced here overnight will catalyze a major selloff.
Featured image from Shutterstock.