Ether fell below $1,400 soon before press time, extending Monday’s 10% slide, its biggest single-day percentage slide in over a month.
The two-day slide marks a clear breakdown of the six-day trading range of $1,460 to $1,660.
Sellers appear to be in total control, as evident from the nearly absent lower and upper wicks in Monday’s candle and the going candle. Such candlesticks represent a bearish mood and often portend deeper declines.
The daily chart MACD histogram, an indicator used to gauge trend strength and changes, is charting smaller bars above the zero line, a sign of loss of upward momentum.
The focus, therefore, has shifted to the 50-day simple moving average at $1,293. Resistance is seen at the previous week’s high of $1,664, followed by $2,160, the interim low registered on Jan. 24.
“A pullback in Ether may find initial support at the 50-day MA (~$1,293), but we expect an eventual retest of interim support ($1,000) on the next down-leg,” Katie Stockton, founder and managing partner of Fairlead Strategies, wrote in a research note published Monday, noting short-term signs of exhaustion.
Stockton attributed the pullback from recent highs to short-term signs of exhaustion and said ether would take at least a few months to establish a major low.
An anticipated interest rate hike from the Federal Reserve on Wednesday seems to have taken center stage away from the supposedly bullish Ethereum merge tentatively due on Sept. 19, which powered last week’s rally from $1,200 to $1,660.
The U.S. stocks were trading lower at press time, adding to renewed weakness in ether and the broader crypto market.