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Ethereum Technical Analysis: ETH’s inverted Adam and Eve to drop below $500?

3 Min Read
Last Updated March 27th 2021

Daily Ethereum ETH Price Analysis

  • The 50-day SMA ($490) in the daily chart has become an important support level.
  •  Grayscale has added 131,254 ETH tokens to their holdings.

After ETH failed at the $615 resistance, it managed to drop down to $545 over the last eight days. However, multiple indicators suggest that a further downturn is expected. Let’s do a quick technical analysis to understand better what’s going on behind the scenes.

 

Ethereum to drop below $500?

The last four sessions in the daily chart have been trending below the 20-day SMA. As we mentioned yesterday, the price has formed an inverted Adam and Eve pattern. Going by technical analysis, the downside target for the price is $420. The MACD shows increasing bearish momentum, which adds further credence to our bearish hypothesis.

eth/usd daily chart 121120

Image: ETH/USD daily chart

Another interesting factor is that the Bollinger Band in the daily chart has stopped its contraction. This means that the price has entered a period of high volatility. So, one may expect larger price swings.

eth/usd bollinger band chart 121120

Image: ETH/USD daily chart

The monthly chart has already flashed the sell signal with a green-nine candlestick in the TD sequential indicator. This is called a sell signal because the price tends to go on a downtrend after flashing this sign.

eth/usd monthly chart 121120

Image: ETH/USD monthly chart

The downside target for the price lies at the 20-bar SMA ($275).

 

Grayscale boosts Ethereum holding

Institutional investors remain unfazed by the reducing prices as Grayscale added a whopping 131,254 ETH tokens to their holdings. This has boosted its total funds under management (AUM) of Ethereum, held by Grayscale, up to $1.66 billion. 

ethereum tokens

This officially makes Grayscale the world's biggest crypto hedge fund manager. Prior to this, the company's Ethereum holdings stood at $1.64 billion.

 

More Exchanges offer ETH 2.0 staking

Over 100,000 ETH has been locked away in ETH 2.0, staking through Kraken. Other well-known cryptocurrency trading outfits that have announced their support are Binance and Huobi. Coinbase and OKEx will be joining the list soon. This is a highly positive sign as this opens the gateway for millions of crypto users to participate in Ethereum's staking.

 

Ethereum key price levels to watch

If the Adam and Eve pattern is fulfilled, the 50-day SMA ($490) automatically becomes the most crucial level. This level should be strong enough to stop the downflow. However, if this level doesn’t hold firm, we can expect the price to reach the $420 target and then drop to the 20-bar SMA ($275) in the monthly chart.

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