Bottom line: Ethereum long term structure continues to remain bullish against 89.50 lows since March 2020. Over the short term though, bears might be producing a meaningful corrective drop towards 240/250 mark. The crypto should hold below 488.00 resistance.

 Fundamental Outlook:

USDCHF had dropped to weekly low around 0.9160/65 yesterday before finding some bids. The exchange rate is trading close to 0.9200 mark for now and is expected to gain further from here. The US Dollar might be setting up to gain across major currencies over the next few weeks as no deal has been reached on another stimulus.

GBPJPY has managed to rally through 137.00 highs yesterday after having dropped to 133.00 lows over the past week. The anti-risk Japanese Yen has declined as global equity markets rallied in the past few sessions. The exchange might gain further through 138.00/50 mark if the optimism persists in risk assets and vice versa.

Ethereum has managed to raise through 371.00 yesterday before finding renewed selling pressure. The crypto had dropped to 313.00 over the last week on US Dollar strength before finding support. With the US Dollar set to gain, Ethereum might remain under pressure and drop below 313.00 intermediary support.

Technical Analysis:

Ethereum had managed to rally towards 371.00 levels over the past few trading sessions, after having dropped through 313.00 lows last month. The crypto might be preparing to break below 313.00 and push towards 240.00/250.00 levels in the next few weeks.

Ethereum had dropped through 89.50 lows in March 2020. Since then, the crypto has remained under control of bulls and produced a meticulous rally through 488.00 levels on September 01, 2020. The entire rally could be seen as an impulse wave, which should be followed by a corrective drop.

Ethereum bears have remained poised to produce a meaningful corrective drop since 488.00 highs as they prepare to resume the last leg lower towards 240.00/250.00 mark. Also note that fibonacci 0.618 retracement is seen to be passing through 240.00 levels, which remains a high probability bullish bounce if prices manage to reach there.

Most traders might be prepared to initiate fresh short positions around 340/350 potential resistance zone, with protective stop above 488.00 and projected targets below 240.00/250.00 respectively. Only a sustained break above 488.00 would change the bearish structure.

Prepared by

Harsh Japee, Technical Analyst.

Ethereum Chart

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