Ethereum Price Analysis: ETH Falls After Charting Evening Star Pattern

Last Updated July 23rd 2021
4 Min Read

Daily Ethereum ETH Price Forecast
  • The 20-day SMA has temporarily stopped Ethereum price.
  • The parabolic SAR in the 4-hour chart has reversed from bullish to bearish.

After struggling to break into the $1,400 psychological level, the Ethereum price formed an evening star pattern between Friday and Sunday as it dropped to $1,280 in the early hours of Monday. As of now, ETH is sitting on top of the 20-day SMA.


Ethereum Price Dropping To $1,150 Support Line

Ethereum price has dropped from $1,380 to $1,280, losing $100 in its overall valuation. As things stand, the 20-day SMA ($1,280) has stopped ETH’s downward movement. However, this only looks like a temporary stoppage.

eth/usd daily chart 020121

Image: ETH/USD daily

IntoTheBlock’s IOMAP shows us that the Ethereum price is on the path to reach the $1,150 support line. Previously, at this level, 542,500 addresses had purchased 5.7M ETH tokens.

eth/usd volume chart 020121

Image: IntoTheBlock

There are three indicators in the 4-hour Ethereum price chart which support our overall bearish outlook:

  • The 20-bar and 50-bar SMAs have flipped from support to resistance.
  • The MACD shows increasing bearish market momentum.
  • The parabolic SAR has reversed from bullish to bearish.

eth/usd 4-hour chart 020121

Image: ETH/USD 4-hour


Ethereum GitHub Activity On The Rise

eth/usd santiment chart 020121

Image: Santiment

As per Santiment, the amount of daily GitHub submission rate has been on a high for Ethereum. This is a positive sign for the long-term Ethereum price reliability.


Mark Cuban Praises DeFi

Billionaire investor Mark Cuban recently shared his views on decentralized finance (DeFi). In a recent tweet thread on the GameStop (ticker: GME) buying spree via stock trading app Robinhood, Cuban noted that Robinhood’s business model takes fees that in DeFi would otherwise go to the user. 

“Lets talk $GME shorts vs De-Fi. When someone shorts a stock that is already heavily shorted, they have to pay a fee to borrow that stock. In the case of $GME that fee has been hovering around 30% this week. Shorts have to pay (Price x .30)/360 per day. In DeFi thats a 30% APY.”

According to a Decrypt report, Sten Laureyssens, a strategic advisor with Waves Association, explained that when users buy a stock on Robinhood, the company actually holds the shares on behalf of the customer. And if it holds the stock, it can loan it out to short-sellers - people that anticipate the price falling so they can buy it back for less and pocket the difference. And Robinhood did loan out the stocks. 

Borrowing a stock is different than buying it and it comes with a fee. In this case, the fees are estimated aforementioned 30% and Robinhood gets to keep these fees. Laureyssens said: 

Robinhood is banking it from multiple angles here.

 Decrypt cited Tom Bean, the CEO of crypto-based margin trading platform Fulcrum, who said: 

“In defi, shorting interest is not retained by the company whose product you are using. The entirety of interest paid by borrowers, less a small fee, goes to a decentralized group of lenders (on defi lending protocols like Compound, Fulcrum, Aave).”

In other words, those fees being paid by the short-sellers would mostly go back to the users. Cuban wrote: 

“This is one more way that Wall St takes advantage of the little guy. If you are moving from [Robinhood], look to see if you can find some place that allows you to hold the shares and lend them in YOUR name, so you get the Yield (Yield Farming in stocks!).”

Bean, pleased to see traditional investors catching on, said: 

“It's super exciting that defi and crypto is going mainstream and getting promoted by people like Mark Cuban and Elon Musk. Non-crypto people are learning of the advantages of using crypto and defi.”


Ethereum Price Is Expected To Reach These Levels

The Ethereum price is on the course of dropping towards the $1,150 support. If the buyers fail to protect this zone, ETH will fall fast to the $1,000 psychological level.

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