- Ethereum dropped from the $400 critical level to test support at $350.
- ETH/USD path of least resistance could hold downwards if the prevailing negative technical picture remains unchanged.
Ethereum has continued to explore the downside since the rejection from the new yearly high at $415 on August 2. The immediate reversal tested support at $325. However, Ether recovered in a reflex motion settling shortly above $400. Unfortunately, it has not been easy to contain the gains above $400. Sellers seem to be getting the upper over the price owing to the fact that Ethereum tested support at $380 during the weekend trading before a recovery came into the picture.
The trading sessions on Monday and Tuesday saw Ethereum fight to clear the critical hurdle at $400 but price actions remained limited. At the time of writing, ETH/USD has suffered an even greater blow to trade under $375. The price is teetering at $374 as bulls scuffle to keep the Ether above $370 in an attempt to avert possible losses towards $350.
All technical indicators in the short-range seem to be in favor of the negative technical picture. The RSI, for instance, is falling gradually towards the midline after rejection from the overbought region (above 70). As long as the downtrend motion remains intact, Ethereum would be set to explore levels under the short term support at $370.
Consequently, the Elliot Wave Oscillator shows that selling dominance in the market would only increase in magnitude, at least in the current session. The indicator has printed a bearish session since August 6.
However, rapid price action is not expected to be rapid because buying pressure is still present. However, buyers lack a catalyst to reverse the trend and sustain gains above $400. The trading volume is also shrinking in the hour.
Support at $370 has the potential to hold unless something nerve-shattering takes place in the near term. If push comes to shove and losses extend massively, Ether would seek refuge $325, $300, the 50 SMA ($287.33), the main trendline (continuous line), the 100 SMA ($255.40) as well as $225.