Ethereum Plunge 28%: What Happens If ETH’s $2,850 Support Fails?
Leading altcoin Ethereum [ETH] is holding onto a key support level, with its price trending within a descending channel.
A descending channel forms when the price of an asset continues to create lower highs and lower lows, indicating a broader downtrend.
A reading of ETH’s price action on the daily chart reveals that the channel formed on March 12. Since then, the coin has lost 28% of its value.
Break Below or Break Above?
If ETH bulls fail to hold the coin’s current $2,850 support level, its price could break below the descending channel’s lower trendline.
If that happens, the altcoin will change hands at the $2,600 level.
AMBCrypto’s assessment of some key technical indicators hints at the possibility of a break below the current support level.
For instance, ETH’s key momentum indicator suggests that the token is being sold off faster than market participants are accumulating.
The currency’s relative strength index, RSI, and money flow index, MFI, are both below their respective neutral points. ETH’s RSI is at 39.52, while MFI is at 49.39.
ETH’s Elder-Ray index returned negative values, confirming the current bearish trend. The indicator measures the relationship between the strength of buyers and sellers in the market.
When it returns negative values, it means that bear forces are dominant in the market.
Similarly, the dots that make up ETH’s parabolic SAR are above its price at press time. The dots have been in such a position since the beginning of May.
The parabolic SAR is used to identify potential trend directions and reversals. When its dotted line is above the price of an asset, it indicates that the market is in a downtrend.
This suggests that the price of the asset has been falling and it could continue to fall.
If ETH bears force a break below the current support, the next price point for the coin could be $2,780. However, if this prediction is invalidated, the altcoin could rally above $3,000.
