The crypto market continues to bleed in millions of dollars of market capitalization, as previous buffers gained by various cryptocurrencies begin to go down the drain.
Various factors may have affected this bearish trend. Firstly, Bitcoin has failed many times to break through the $12,000 key resistance level, which shows investors that the said price is possibly the highest the cryptocurrency will ever reach in the foreseeable future.
On the other hand, there seems to be a growing FUD in the decentralized finance (DeFi) market nowadays. This is due to many crypto users practicing the so-called yield farming, wherein they lend their crypto funds to platforms and earn more money due to the months-long DeFi craze.
In fact, many in the Chinese crypto community are closing their accounts on crypto exchanges to participate in this activity, ultimately bringing the price of major cryptocurrencies like Ethereum and Bitcoin to go down.
So how will all of these affect Ethereum’s price today and in the coming months? Will Ethereum still be a good investment at the end of 2020? Let’s listen to what the charts say.
Ethereum in Bear Market: More Sellouts to Come
Ethereum has indeed fallen below the $400 level, and is fighting hard to maintain its current price. The 30-day exponential moving average (EMA) is falling fast to meet with the 50-day simple moving average (SMA).
Its relative strength index (RSI) of 42.54 also shows that while there has been a massive selling happening recently, ETH has yet to become oversold. Adding these up with the current state of the market, it is safe to say that the bears have won since last week.
Bottom Forming: Upcoming Comeback?
Conversely, the last couple of days’ lows have been forming an upward pattern, suggesting that many crypto traders are buying the asset despite its state. At the time of writing, Ethereum is trading at $347.94, according to CoinGecko. Traders may find the $330-$340 levels appealing, hence the forming of a support level.
As seen on the chart above, ETH is gaining more traders who buy the asset at higher lows in the last few days. If this continues, then ETH could have a comeback by next week.
For this to happen, ETH has to position itself back to the Fibonacci retracement levels of $367 and $386. Bulls will have to fight harder to keep maintaining higher lows until ETH reaches at least $367.
If ETH stages a comeback by next week, it goes to show that the DeFi market still hasn’t lost its hype. At the moment, the DeFi market has a total value locked (TVL) of $7.94 billion, according to DeFi Pulse. This is still a good number, considering that the market has reached this amount only last month.
However, the bears are still in control of the overall crypto market. Bitcoin and other altcoins need to show up to increase investor confidence in the crypto market. If they fail to do so, then the months’ long rally could find September to be its end.
Disclaimer: The views and opinions expressed in this article are solely the author’s and do not necessarily reflect the views of CoinQuora. No information in this article should be interpreted as investment advice. CoinQuora encourages all users to do their own research before investing in cryptocurrencies.