Ethereum price tanks below $4,000 as a projected correction took hold of the crypto market early on Wednesday morning.
Data from CoinMarketCap showed that ETH/USD dropped by as much as 10% from a high of about $4,392 on October 26 to an intra-day low of $3,928 on Wednesday October 27, but remained within the confines of a rising channel.
The move follows multiple retests of $4,000 with Ethereum now taking liquidity with signs of excess greed and leverage in the market.
The largest altcoin by market capitalisation was trading at $3,999 on most crypto exchanges at the time of writing, representing a 4.47% drop over the last 24 hours. It is down 4% over the last 7 days.
Ethereum Price Still Bullish In An Ascending Channel
Ethereum price is trading within the confines of an ascending parallel channel on the daily chart and it may avoid further losses if it avoids tanking outside the pattern.
The governing chart pattern dictates a bullish bias on ETH/USD, suggesting the possibility of the smart contracts token climbing higher and what is currently being experienced could just be a healthy correction.
However, it is important to note that ETH price is holding onto he last line of defense at the $3,900 psychological level embraced by the lower boundary of the rising channel.
Failing to hold above the said support level could spell doom for Ethereum which would be susceptible to further losses, dropping towards the $3,800 support level, then towards the 50-day Simple Moving Average (SMA) at $3,490, 100-day SMA at $3,238 before eventually tagging the lower boundary of the rising channel at $3,200.
On the upside, ETH price remains bullish if it continues to hold within the confines of the ascending parallel channel. A closure above the $4,000 psychological level could see Ethereum bulls face resistance immediately at the middle boundary of the governing chart pattern at $4,260. An additional hurdle may appear at the $4,300 psychological level.
The bulls may need to be patient for a rally upwards, as ETH price may face further resistance at the October 26 high around $4,392, then the October 21 high at $4,410, before confronting the upper boundary of the rising channel at $4,632.
Until then, the MACD and the RSI Indicators show that ETH correction may continue in the near term.
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