ETH Slides 14% Over The Past Day, Signs Signal Deeper Drop Ahead

ETH slides 14% over the past day but the bearish signs are signaling an even deeper drop ahead so let’s check on the Ethereum price news and analysis below.

A few cryptocurrencies had huge growth in 2020 as Ethereum did as the altcoin led the market into recovery at the start of the year while trying to revisit the accumulation range in the Defi trend that helped the asset skyrocket. However, today ETH slides 14% which is a sign that the momentum is waning as the losses cooled off to about 7% while the bearish divergence forming signals more downsides ahead. Overnight and into the morning today, during the market opening, the crypto market started correcting. Bitcoin started a selloff and Ethereum followed, each dropping in a violent move.

Ethereum dropped by 14% from yesterday’s high and after setting a new 2020 high at $490, it dropped to $420 per ETH token on some exchanges. The second-biggest altcoin is back at $440 at the time of writing but the massive daily bearish divergence formed on the Relative Strength Index suggesting that the correction has just started. According to the Relative Strength Index on the charts, Ethereum could have a lot more to lose as it made higher highs against the US dollar. The indicators however continue to make lower highs and this movement is called bearish divergence that forms before a reversal trend.

Divergences are among the most reliable reversal signs but they don’t tell when they will happen. A new high was set yesterday before the bearish pressure took over. Once the bears took control, things got out of hand and the correction became quite violent. In addition to the divergence of the daily timeframes, the ETH/USD pair triggered a TD 9 sell setup on the indicator with Sunday’s new weekly open. The charts show that the 9 candles are reliable and have been in the past as well, calling most of the pivotal top formations.

Coinciding with the bearish divergence, the signals are even more damaging for the smart contract focused crypto. If the drop keeps on going, Ethereum has support to test at $390 before risking the retest of the past high resistance turned support. Below the $390 level, targets could reach as low as $300 and $275.