Why Ethereum’s (ETH) Decline Beneath $1.6K Could Be Vital for Traders

The previous month saw the Ethereum price growing to explore the top area of a long-term climbing wedge on its daily chart. Meanwhile, reveals from the Bollinger Bands’ upper band saw the leading alternative token slipping beneath the 20EMA and 50EMA.

The token now hovers at a vital juncture. A possible bounce back from the support at $1,603 might support buyers to prevent extended downtrends. While publishing this news, the alternative token changed hands at $1,639, dropping about 5.16% over the last 24 hours.

Ethereum Daily Timeframe

The buying momentum from Ethereum’s mid-June lows triggered an uptick beyond the BB’s basis line. The altcoin witnessed a more than 73% ROI (return on investment) from the July 13 lows and snapped the crucial $1,600 – $1,700 value over the previous week.

After wavering around the BB’s upper band within a month, the latest selling revival dragged Ethereum beneath the basis line and the short-term Exponential Moving Averages. Price action remaining beneath the borders on the 24hr 20-50 Exponential Moving Average would see bears expediting their superiority within the upcoming days.

Meanwhile, a decisive closing beneath the 50 Exponential Moving Average might support Ethereum to retest $1.730. This stance might trigger a low volatility period around the Exponential Moving Averages/ any drop under the support floor at $1,603 might mean a selling signal. That might see $1,500 near the BB’s lower band providing short-term bounce-back opportunities.

Reasoning

The RSI (Relative Strength Index) declined beneath the midline, reflecting a brief selling superiority. Investors can watch for revivals to the 50-support for possible bearish invalidations. An action close to the midline would only confirm the alt’s slow-moving biases.

The A/D (Accumulation/Distribution) indicator aligned with the latest drop but secured a support floor. Recoveries from this mark would confirm a potential accumulation phase. And that might ease the prevailing selling momentum.

Final Thought

Considering the climbing wedge breakdown nearing the support of $1,603 at the BB’s lower band, buyers would aim to protect their positions. However, Ethereum needs a closing beyond its daily 50EMA to confirm massive rebound chances. The possible selling/buying target would stay as mentioned above.