According to a recent technical analysis by Rekt Capital, Ethereum (ETH) has experienced a significant breakdown over the past two weeks. The cryptocurrency closed below a crucial support level (represented by an orange area on the chart) two weeks ago, initiating the first step in confirming the breakdown process from this former support.
Since then, ETH has been witnessing downside wicks into the $2791 support level (circled in orange) while simultaneously facing rejection from the orange boxed area, which now appears to be acting as resistance.
As a result, ETH has broken down into a range between $2791 and $3300, with the orange circled area serving as the Range Low support and the orange boxed region acting as the Range High resistance.
ETH is currently at the top of the range but is finding it difficult to break through. As long as the orange boxed area continues to act as resistance, there will always be a possibility that ETH could drop below this range, predisposing the price to a bearish bias.
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Altcoin Market Faces Bearish Pressure from Halving and Hype Cycle
Historically, the Bitcoin Halving event has been a bearish event for the Altcoin Market, and this effect is further amplified by the Altcoin Hype Cycle theory. Following a fantastic first quarter, the hype surrounding altcoins still needs to dissipate. This could mean that ETH’s price will continue to dwindle within the current range and consolidate in the coming weeks.
Altcoins Expected to Bottom Out in Preparation for Q2 Hype Cycle
Despite the bearish pressure, the current market conditions also suggest that altcoins should bottom out on their retraces in the coming several weeks as they prepare for the new Q2 Altcoin Hype Cycle. Rekt expects this bottoming process to begin as early as mid-May, but more realistically, it will begin in late May or early June.
As Ethereum pushes through this critical range between $2791 and $3300, investors and traders should keep a close eye on the cryptocurrency’s ability to break beyond the Range High resistance.
The bearish pressure from the Bitcoin Halving and the Altcoin Hype Cycle may continue to impact ETH’s price in the short term, potentially leading to further consolidation within the current range.
However, the anticipated altcoin bottoming out in preparation for the Q2 Altcoin Hype Cycle offers a glimmer of hope for the market.
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