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ETH/USD has fallen to new lows for the month of May, and as June is set to embark in a few days trading conditions are anxious and intriguing.
ETH/USD is trading below the 1800.00 level as of this writing and the broad cryptocurrency market remains fragile. Many other cryptocurrencies use Ethereum as a barometer of speculative conditions. ETH/USD is traversing it lowest values displayed in May, and as June waits to unleash its trading support levels continue to look vulnerable. Ethereum’s major counterparts are also being challenged by long term low prices as bullish speculators seemingly have lost their appetite for risk.
The crux of the matter for ETH/USD is that its value is testing vital support barriers that are both short and long term technically. Lows are testing prices from the middle of this May, but are also challenging values seen in July, June and May of 2021. If these crucial barriers are broken lower and ETH/USD penetrates the 1700.00 mark and shows an inability to climb above this juncture quickly, it could set off loud alarm bells among key investors and traders of Ethereum.
While the 2000.00 juncture giving way earlier this week and not being able to be re-conquered with a reversal upwards that could be maintained is noticeable, the fact that ETH/USD is now swimming near crucial support from last year is ultra-concerning. Technically ETH/USD has yet to have a capitulation trade like its major counterpart Bitcoin.
This is perspective perhaps, but it is based on the notion BTC/USD is trading near prices seen in January of 2021 and December of 2020. Ethereum has not yet hit those lows, meaning if ETH/USD were to drop to January 2021 and December 2020 values it would be trading near the 1,200.00 to 1,000.00 ratios technically.
The current price action of ETH/USD is not building a strong amount of confidence and its magnetic price action near current support levels suggests that if the next important levels demonstrate weakness, that price velocity downwards could be problematic. April was a bad month for ETH/USD, but May proved to be equally distasteful regarding downward movement if a speculator was trying to find sustained bullish momentum. The long term bearish trend of Ethereum is still showing teeth, and until sustained higher resistance levels are made to look vulnerable, shorting ETH/USD is likely going to attract sellers who are brave enough to swim its whirlwind waters.
ETH/USD Outlook for June
Speculative price range for ETH/USD is 986.00 to 2827.00.
Traders need to be extremely careful as ETH/USD traverses its current territory. The use of conservative leverage, stop loss and take profit orders cannot be emphasized enough. If ETH/USD were to break below the 1700.00 mark and sustain prices below, this would be an additionally bad signal. The current price of ETH/USD is a poor indicator too. However, if the 1700.00 ratio is proven weak and the 1650.00 mark suddenly is targeted, price velocity could become rather wicked for all speculators.
Yes, reversals higher will certainly be seen, but for perspective – day traders need to question how long they are willing to hold onto a long position under the current trading conditions. Upside movements have been hit with strong reversals lower on a steady basis and this may continue during the month of June. Nervous market sentiment continues to be abundant and traders who believe ETH/USD is vastly undersold need to understand while they may be proven correct long term, that they may not have enough money in their accounts to withstand any additional downward spikes which may be seen in the coming weeks.
ETH/USD has shown extremely intriguing consolidation the past few days as it traverses within the lower elements of its price range. Short term traders cannot be blamed for pursuing additional downside momentum; however they need to be extremely careful. Yes, cryptocurrencies have a known history of violent price action, but the coming weeks may be more turbulent than normal if important support levels in ETH/USD are flirted with below.
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