Traders Expect Ethereum to See Violent Rejection as Multi-Year Trendline Nears
- Ethereum’s intense uptrend has allowed it to climb all the way to $200
- This level coincides closely with a multi-year descending trendline that has been forcing the crypto lower
- One trader is flipping short due to the heavy resistance around this level
The market-wide uptrend seen throughout the past week has proven to be particularly beneficial for Ethereum, which has rallied from weekly lows of under $170 to highs of $200.
This uptrend has led the cryptocurrency up to a key resistance level that coincides closely with a descending trendline that it has been respecting for the past several years.
Analysts don’t seem to anticipate that Ethereum will surmount this level, as the resistance here could prove to be too intense for bulls.
Ethereum’s Rally Stalls at $200 as Analysts Watch Reaction to Multi-Year Trendline
At the time of writing, Ethereum is trading up under 1% at its current price of $196, marking a slight climb from daily lows of $193 and a decline from highs of $198.
ETH is currently trading at its highest price levels seen throughout the past several weeks, and $200 happens to be a key level that seemed to be the point at which its rally turned parabolic in early-February.
The cryptocurrency is also fast approaching a descending trendline that has been established throughout the past several years.
This trendline – as seen in the below chart from an analyst on Twitter – was first formed in mid-2017 against the crypto’s BTC trading pair, just prior to the intense parabolic rally seen later in the year.
Image Courtesy of Bagsy
It does appear that this has been guiding the cryptocurrency lower in the time since being established, although it is in the process of attempting to surmount this level currently.
Resistance May Prove to Be Insurmountable for ETH; Traders Flip Short
The break above this trendline may not come about anytime soon, however, as analysts are noting that the horizontal resistance around $200 may spark an Ethereum selloff.
One popular pseudonymous trader on Twitter spoke about this in a recent tweet, explaining that he shorted ETH because of its lack of volume and inability to take out its previous highs.
“I shorted ETH. Don’t blindly follow this. It has been extremely strong and this is counter trend to help protect long exposure elsewhere. Clearly in an uptrend but the lack of volume and barely taking out the last highs is suspicious,” he explained.
Image Courtesy of Pentoshi
Bitcoin’s struggle to break above the upper-$7,000 region could also hamper Ethereum’s momentum in the hours and days ahead.
Featured image from Unplash.
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