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Bitcoin continues to dominate the conversation when it comes to cryptocurrencies. BTC has been setting the market on fire and shedding market value in chunks on this Summer’s roller coaster ride. This, in turn, has had a dramatic impact on the value for other cryptos in the marketplace.
In a recent post on www.ccn.com, the future outlook for Ethereum was discussed at length. As the second-biggest crypto currency in the market, that outlook is dire at best. Once trading at $363.30 at its peak, it has already lost almost half of its value. A trading level of $140 has been set as an exit point for many investors looking to salvage their current stake.
Some traders have gone as far to say that ETH has already crashed. They say the currency is at the point where it will be “dead money for years.” While the bulls have definitely gone into hiding, this may be a slight overreaction. Danny Merkel with Charting Trends did release the following tweet on Twitter:
“In my opinion, Ethereum is a busted bubble with huge overhead resistance. For traders with no exit plan, this will probably be dead money for years.”
In my opinion, Ethereum is a busted bubble with huge overhead resistance.
For traders with no exit plan, this will probably be dead money for years. pic.twitter.com/W8NqY5gZsM
— Danny Merkel (@ChartingTrends) August 29, 2019
Known in the industry as a looming “Death Cross”, current market conditions could continue to drive down ETH value. The low point of $140 has been established as a significant level if this takes place. An impending “Death Cross” is presented as the difference between the 50-day moving average (MA) and the 200-day MA.
Most crypto industry insiders are not going as far as other calling ETH dead. Yet, they do believe that the current correction is not hit the bottom. There are multiple market signals that point to further declines. The downside potential remains high in light of recent market swings.
When Ethereum did hit its high of $363.30 early this year, the inability to hold at the $300 level was significant. This allowed the bears to reenter the game. The market was showing those signs as early as June. Using the daily RSI data, the shift from bear to bull over the summer became rather evident. A slight uptick towards the end of June proved to me a mirage.
Some industry analysists warn against getting in the market with ETH at current values. ETH is oversold on the daily RSI and the bears are firmly in control. There are no recent trends that point to a reversal in the short term. The bearish value on a Trading View chart was highlighted at $200. It closed below that point at $164.12 at the end of August.
This CCN post was written by Kiril Nikolaev. He is a CFA Charterholder and financial professional. His focus is on the cryptocurrency industry from an investment standpoint.