Ether Price Indicator Turns Bearish for First Time Since October

Momentum has deteriorated, supporting a lower high compared with May's peak.

AccessTimeIconJun 8, 2021 at 9:06 a.m. UTC
Updated Mar 6, 2023 at 3:16 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

The path of least resistance for ether appears to be to the downside as a widely tracked indicator rolls over in favor of the bears.

"The weekly MACD indicator has flashed a sell signal for the first time since going positive in October 2020, which suggests the correction may resume beyond the near-term," Katie Stockton, founder and managing partner of Fairlead Strategies, said in a weekly research note published Monday.

Moving average convergence divergence (MACD) is a technical indicator used to gauge trend changes and strength. Chart analysts consider a move below zero to signify a bearish shift in momentum and a move into positive territory as a bullish reversal signal.

Not only has the MACD dropped below zero, it is also now at the most negative since September 2018, implying the strongest bearish bias in nearly three years.

The weekly MACD for bitcoin turned bearish in the second half of April, signaling scope for a sell-off. Back then, the biggest cryptocurrency by market value was trading above $50,000. Prices fell by 35% in May, hitting lows near $30,000.

Ether, the native token of the Ethereum blockchain, was trading near $2,500 at press time, representing a 3% drop on the day and a 9% decline on a 24-hour basis, according to CoinDesk 20 data.

Ether daily chart
Ether daily chart

The latest drop follows repeated bull failures at the 50-day simple moving average (SMA) hurdle in the past two weeks. The 50-day SMA currently resides just above $2,900.

"Intermediate-term momentum has deteriorated, supporting a lower high versus the May peak near $4,380," Stockton said, adding that immediate support is located at $2,038, under which the focus would shift to the 61.8% Fibonacci retracement near $1,730.

"We would not rule out a retest of the 61.8% retracement level," Stockton wrote. "As long as the 61.8% retracement level is intact, so is the long-term uptrend behind ether, which remains supported by the monthly MACD."

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.