Key facts:
If the price of bitcoin continues to drop, it will possibly be followed by other cryptocurrencies.
Ether is trading at a price lower than the all-time high reached in the previous bull cycle.
There are those who believe that bitcoin (BTC), ether (ETH) and cryptocurrencies in general, have already bottomed out in their prices in this bear market. On the other hand, there are also analysts who consider that this is not necessarily the case and that the price of digital assets could fall even more.
As CriptoNoticias has recently reported, prices of USD 12,000 or USD 8,000 for bitcoin are among the possibilities that some specialists foresee. History shows that the rest of the cryptocurrencies follow the trend set by bitcoin, although with greater volatility.
In the case of ETH, which is the cryptocurrency of the Ethereum network, a forecast can be made of which would be the next supports to reach. The Cryptopedia, which is the educational section of this news portal, explains the following:
The concepts of “support” and “resistance” refer to a price level or zone that a financial asset reaches at certain times, but which, for various reasons, it does not usually exceed or cross. In most cases, when reaching this zone, the price tends to stop to stabilize or reverse the trend it had been registering. However, it can also happen that the price breaks the barrier and the trend consolidates.
Criptopedia, educational section of CriptoNoticias.
According to the theories that guide technical analysis, what was once a resistance (that is, a price that the asset has a hard time breaking through) becomes, after it breaks through it, a support (that is, a price at which the asset has a hard time “breaking” downwards).
The Ethereum cryptocurrency is trading at $1,100 as of press time. The following graph marks which would be the next supportsin case its price continues to fall:
The first support (red horizontal line) would be in the area of USD 970resistance that was not violated in mid-February 2018.
The second support (green horizontal line) is found in the area of USD 870. On April 30, 2018, ether hit that barrier and bounced lower.
The third support (blue horizontal line) could be considered between $490 and $520. Among these prices, ETH found resistance both during its bearish cycle in July 2018, and during the start of its most recent rise, in August 2020.
It is worth clarifying that technical analysis works with probabilities, based on the psychology of the market, but does not purport to provide foolproof price predictions. Faced with the impossibility of predicting with certainty what will be the floor at which a financial asset will reach, investment techniques such as the method dollar-cost-averaging (DCA).
Clarification: This article does not constitute a recommendation to buy or sell any cryptocurrency. Each reader should do their own research before making any kind of investment..