Ethereum price was on its way to reaching new all-time highs before it dropped below 300 USD. Is this the end of Ethereum price’s bullish uptrend? Why the sudden drop? What does this drop mean for the overall Ethereum price action and what price levels should investors keep an eye on? This is what we will cover in our article today.
Ethereum price dropped sharply to fall as low as 275 USD. Why the sudden drop in price?
First of all, it is very important to note that the drop in price was not limited to Ethereum. In fact, most Cryptocurrencies saw sharp decreases in price. There were many reasons that could have triggered the bearish momentum in Cryptocurrencies. Notably:
- Chinese regulators banning ICOs and considering their fund raising activities illegal.
- Litecoin price reaching all time high and normal profit taking happening. The selling was probably amplified due to the Bearish momentum in the cryptocurrencies’s market.
- Challenges with Bitcoin scaling upgrade as some miners recently announced withdrawals off segwit2X. Bitcoin’s scaling solution has been activated successfully but the execution of the proposal is no easy task. Expecting more volatility.
- Ethereum’s upcoming metropolis upgrade towards the end of september.
As we can see, the timing of the different events, along with the configurations in the leading Cryptocurrencies price charts have contributed to the selloff we saw this weekend. In addition to it being a long weekend.
Is Ethereum price Bullish or Bearish at this point?
Ethereum’s price has seen an increase of 100% since August first so a pullback is to be expected. When Ethereum is trading at a price of $307, this drop represents a decrease of %15 which is not significant relative to the increase in price that we saw in August. That’s why when analyzing a price action, one needs to differentiate a temporary bearish momentum from a bearish trend.
Ethereum price needs to claim the $325 level to be back in the ascending channel and potentially another leg up. If the 325 USD support level is reclaimed, we might see another attempt to reach new all-time highs. Maybe a successful attempt this time, especially if supported by an increasing volume.
Resistance levels to watch are $325 and $400 and strong support at $250 and $200. These were important Ethereum price levels we identified last month for our readers and they are still valid. In that article, we mentioned how Ethereum price could even go as far as backtesting $250 before resuming uptrend.
All in all, we believe Ethereum price is holding pretty well considering all the events happening at the same time. The question that comes to investors mind at this point is the following: Time to sell or buy the dip? We believe more and more investors are seeing the disruptive potential of Cryptocurrencies and especially Ethereum. China’s ban is a bump on the road but the demand is going to continue increasing.