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Ethereum and the entire cryptocurrency market have seen a slight uptrend throughout the past few days, with Bitcoin’s continued defense of its $10,000 support creating a backdrop for other assets to recover against.
Although it does appear that ETH is on its way to making a full recovery, there are still some roadblocks that stand in its way.
The $400 level will likely act as strong resistance in the near-term due to its technical significance. If this level is reclaimed and established as support, it may allow for the asset to see serious upside.
One analyst is also pointing to a potential wave pattern that suggests this relief rally will be followed by serious near-term downside.
He specifically is eyeing a move down towards $240 in the near-term.
Ethereum Rebounds from Recent Lows as Bulls Aim for $400
At the time of writing, Ethereum is trading up over 5% at its current price of $373. This is around the price at which the cryptocurrency has been trading for the past few hours.
Throughout the past week, sellers have been aggressively trying to push ETH lower, with its support at $320 holding strong on multiple occasions.
The strength of this level, coupled with Bitcoin’s ability to remain within the five-figure price region, has allowed ETH to recover a good bulk of its recent losses.
Analyst: This Pattern Suggests ETH May Move Towards $240
One analyst explained that there is one technical pattern that suggests further downside is imminent.
He points to wave pattern, noting that this could be the relief rally that comes before a major decline that sends it down to $240.
“I’m wondering if maybe this abc up is complete and is just a shallow one. Far too many people saying bottom is in for my liking, even from chads I typically respect. The bottom aint in imho, and I’m using eth as my barometer because its clearer,” he said.
Image Courtesy of SmartContracter. Chart via TradingView.
If Ethereum does plunge to these lows, it could create a headwind that strikes a serious blow to smaller altcoins that have been performing quite well throughout the past few months.
Featured image from Unsplash. Charts from TradingView.