Panicked Selling Pressured Ethereum: USD/ETH (ETH=) Prices

Panicked Selling Pressured Ethereum: USD/ETH (ETH=) Prices

The recent market crash was also a stress test for networks, as immediately transaction activity picked up. The Ethereum network was the first to show a significant backlog, essentially clogging transactions for close to an hour. For anyone attempting to sell coins, the transaction may be either very expensive, or stall until prices correct even more.

While the ETH gas price is not exorbitant, it still requires $0.29 to get the transaction into a block sooner. USDT transactions are also affected, as nearly 2.9 billion stablecoins are only movable through the Ethereum network. This means shifts between exchanges will also become slower.

In the meantime, Ethereum prices unraveled to $138.12, on rapid selling. This caused a series of liquidations of DeFi derivative trading and collateralized debt. A slower network means potential problems for some of the participants, as they have little time before their collateral is liquidated. Fast action is required for projects like Maker, and with a congested network, this may not be possible for all traders.

The sudden, rapid price unraveling has not affected the Bitcoin mempool that rapidly. But for Ethereum, the network shows it is both instrumental to the crypto ecosystem but also a source of failure.

The Ethereum network has congested during booming periods as well, or during high-level usage of one game or contract. But this time, the network reacted to market conditions, with potential repercussions and liquidations.

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

The projected upper bound is: 166.76.

The projected lower bound is: 78.06.

The projected closing price is: 122.41.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.

A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 16.4096. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 14 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 24.07. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 23 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -243.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 11 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 22 period(s) ago.

Rex Takasugi – TD Profile

FOREX ETH= closed down -4.570 at 123.190. Volume was 17% below average (neutral) and Bollinger Bands were 137% wider than normal.

Open     High      Low     Close     Volume___
129.920 134.940 85.900 123.190 161,243
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 198.84 218.80 179.02
Volatility: 242 145 96
Volume: 343,577 283,714 121,912

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FOREX ETH= is currently 31.2% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect moderate flows of volume out of ETH= (mildly bearish). Our trend forecasting oscillators are currently bearish on ETH= and have had this outlook for the last 13 periods. Our momentum oscillator is currently indicating that ETH= is currently in an oversold condition.

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