Ethereum Price Recovering From ICO Sell-Off Slide
The Ethereum price trajectory has seen some abrupt swings of late. Much of this can be attributed to a pick-up in ICO sell-off activity seen over the past few months. A stream of ICOs offloading Ethereum (ETH) had led to steep dives in Ethereum’s price over August and September. Research conducted by TrustNodes reveals that ICO projects have offloaded 3 times more ETH over the past 10 days than they did in August. About 82,000 ETH were sold on September 4 alone. Through August, the market has seen average daily ETH sales from ICOs varying between 1,000 – 5,000 coins. September’s average, so far, is about 10,000 ETH. Reasons for such offloading by ICO start-up projects include attempts to cover costs and concerns over a bearish market.
Ethereum Trading at Over 80% Discount Currently
Ethereum (ETH), the second largest cryptocurrency by market capitalization, is currently trading at an 84% discount. In mid-January this year, ETH touched $1,400; since then, the broader trend has largely been downwards. The upswings seen towards the end of January, mid-February, early May and late July have provided enough opportunity for investors looking to exit their positions in ETH. However, the point to note here that each swing has only taken the Ethereum price line closer to the long-term trend line (the downward sloping green line in the chart above) serving as a major resistance. And a breakout from this resistance would kickstart a reversal for ETH’s price. That’s when investors looking to ride on the next ETH high wave would be looking to enter or expand their positions.
Given that ETH is currently trading at about 80% lower than its peak in January – a resistance break-out may just be the opportunity that investors can make use of.
Current Technical Analysis Lends No Support to the Bulls
There are currently no validating technical signals indicating a reversal. However, ETH’s price movement since May 2018, does show that the bears are weakening. Moreover, sell volumes seem to be continuing with their trend (the red volume bars in the chart above). Even the Relative Strength Index (or RSI) – at 37 – is way below the neutral line of 50.
While ETH’s price has clearly been in a downtrend since May 5th, the line has been getting closer to long-term resistance. One big push, and we may soon see Ethereum breaking out from its long-term bearish trend. Given the current downtrend is in its fifth month now, who knows: the bargain sale may be ending soon.
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