3-Day Analysis:
Big Picture: Once Ethereum lost its breakout-based supports, the sell-off quickly escalated into panic selling. It has now returned to the initial breakout-based support that triggered an aggressive upsurge in July. The selling pressure remains high, but sellers may look to take a breather as another massive support is tested. Buyers’ resolve will be put to the test, as holding this level is critical to at least partially halt this aggressive sell-off.
On the Upside there is plenty of new supply in the market right now. The first point of resistance is at 1235, followed by 1280. Ethereum is due for heavy short-coverings, which could result in a strong intra-day bounce. However, the bounce is likely to sell out quickly. Moreover, there is significant intraday resistance at 1350-1380.
On the Downside with extremely oversold conditions the supports are likely to come into play now. Fresh lower-time frame supports are forming at 1165. Following this the next support can be seen at 1135. However failing to hold these supports will send Ethereum lower towards 1080-1030 levels. Upon testing these lower supports expect extremely strong short-coverings.
