- ETH/USD has resumed the sell-off amid worsened market sentiments.
- A sustainable move below $190.00 will create a death spiral with $116.40 becoming a possibility.
Ethereum (ETH) dropped below $200.00 handle to trade at $199.10 by press time. The second-largest digital asset with the current market value of $21.9 billion, has lost over 3% amid the increased bearish momentum on the market. ETH/USD has been moving in sync with Bitcoin, influenced mostly by speculative sentiments and technical factors.
ETH/USD: Technical picture
A sustainable move below $200.00 is a worrisome signal for ETH traders as it may lead to a deeper decline. If the price fails to recover above the said barrier within the nearest trading sessions, the bearish trend may transform into a death spiral with the next focus on the recent low of $190.17 and $180.00, which is the middle line of the weekly Bollinger Band. Notably, the RSI on the longer-term charts has reversed to the downside, which means that the sell-off may gain traction and December low of $116.40 is no longer a distant possibility.
On the upside, a recovery above $200.00 will help to improve the short-term picture and bring $206.70-$207.00 back into focus. This local resistance area is created by SMA50 1-hour and the upper line of 1-hour Bollinger Band. Once it is out of the way, the upside is likely to gain traction towards $210.00 and potentially $223.00 (SMA100 1-hour, SMA50 4-hour) This development will improve the short-term picture and negate the immediate bearish scenario.