When Bitcoin and the cryptocurrency market face tremendous selling pressure, large altcoins like ETH are also trapped in a strong downtrend, taking away all the profits generated since the beginning of 2020.
According to analysts, ETH will continue to decline in the near term, which could push the price to as low as $ 180.
Despite the weak technical index, the high DAI / USDC shows that this is a good “re-entry” time for ETH.
ETH is technically weak as the market continues to decline
At the time of writing, ETH is trading down 0.82% at its current price of $ 221, down slightly from the daily high of $ 225.
Downtrend started exactly one week ago, when the second largest cryptocurrency by market capitalization surged to a high of $ 275 before plummeting to a low of $ 210. In the time since the sell-off, ETH has been trading sideways around current prices and struggling to find decisive trends.
Analyst Luke Martin believes that ETH could soon drop to $ 180.
That $ ETH short worked out nicely.
This is the next setup I'm watching:
– Luke Martin (@VentureCoinist) February 29, 2020
“This is the next setup I'm following: If ETH closes below the daily support of about $ 222, I anticipate a further lower price of $ 180-200.”
This strange factor indicates that the current ETH price is a good entry point
Su Zhu, CEO at Three Arbow Capital, pointed out an interesting event when observing the DAI / USDC trading pair, explaining that this could act as a sign of risk aversion to ETH, signaling a The re-entry is suitable for ETH.
DAI / USDC at the highs of the year now, a good barometer of risk aversion
– Su Zhu (@zhusu) March 1, 2020
"DAI / USDC is at the highest level of the year, a sign of risk aversion. Can signal the level re-entry pretty good on ETH / DAI and ETH / USD pairs ".
He continued to explain his reasons, noting that DAI trades on the USDC peg when there is a large liquidation of ETH / DAI.
DAI trades above peg whenever there's large liquidations on ETH / DAI, demand for DAI. It will result in the SF going lower on MKR and represents a flushout of leveraged longs
– Su Zhu (@zhusu) March 1, 2020
"DAI trades on latches whenever there is a large liquidation of ETH / DAI, which means there is high demand for DAI. It will lead to a drop in SF on MKR and liquidation of a series of leveraged long orders. "
Although ETH is technically weak for a short time and may drop a bit further, it is possible that the strong liquidation of long positions with leverage will stimulate prices to rise soon.
Can ETH start to perform worse than Bitcoin?
Analyst Luke Martin recently predicted that ETH would be underperforming as the cryptocurrency market enters March.
As we move into March, I am expecting $ ETH underperformance.
Alts had a killer start to 2020 but majors are all turned over with momentum lower.
Betting on lower prices for ETH. pic.twitter.com/kNBXGvVxOC
– Luke Martin (@VentureCoinist) March 1, 2020
"When we move into March, I expect ETH to perform poorly.
Alts has risen sharply since the beginning of 2020 but all have been decreasing since last week.
Bet on a lower price for ETH ".
According to his chart, reversing the trend is likely to bring the ETH / BTC pair below 10% in the coming weeks ($ 0.0218-0.0223), which is an important historical resistance area that in terms of The theory will play a supporting role in the coming weeks.
DeFi issues may increase the risk for ETH
Not only technical analysis shows that ETH bulls are in a difficult period, but so are the underlying indicators.
While the blockchain decentralized financial ecosystem (DeFi) has seen tremendous growth over the past few months with a series of innovative projects that attract thousands of users, there are also problems. .
As reported, 2 manipulations of DeFi bZx manipulation caused the participants to lose $ 300,000 and $ 650,000, respectively, for a total of nearly $ 1 million. Recently, a crafty ETH user made $ 140,000 worth of ETH from the contract, while a human error on the Chainlink feed allowed users to earn around $ 30,000.
Some commentators claim these incidents in DeFi demonstrate ETH's “killer use case” and are likely to impede adoption.
You can see the price of ETH here.
Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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