Ethereum priceis having a meltdown today. The world’s second-biggest cryptocurrency is trading at $1,115, which is 11% below yesterday’s close of $1,250. The current price is 17% below the highest level during the weekend while its market cap has dropped to more than $126 billion.
Ethereum is not the only struggling cryptocurrency. Bitcoin, which rose to more than $41,000 during the weekend has dropped by more than 5,000 points while Bitcoin Cash has dropped by more than 100 points. Stellar price is down by more than 22% while Cardano is down by more than 18%.
Why’s this happening: In the past, such dramatic declines in cryptocurrency price was accompanied by important news. Today, there’s no news that’s pushing them down. Therefore, in my view, there are three main reasons why Ethereum price is falling.
First, the US dollar has jumped by more than 0.35% today due to the overall pessimism about the rising number of coronavirus cases in China. It is also rising because of the political crisis in the United States, where Donald Trump could be impeached again. The USD has an inverse relationship with cryptocurrencies.
Second, ETH price is falling because of the overall weakness in the financial market. Today, global stocks, commodities, and other assets are also falling. As such, this weakness is in part because of the overall price action.
Finally, Ethereum is falling because of profit-taking after it rallied by more than 10% during the weekend. In the past few weeks, ETH and other currencies have soared during the weekend and fallen early in the week.
Ethereum price prediction
On the daily chart, we see that Ethereum price has hit a strong resistance. It is still above the 50-day and 100-day exponential moving averages and the rising black trendline. Also, it has moved from the extreme overbought level of 88 to the current 67.
Therefore, in the near term, the price may continue falling as bears target the next support at $1,000. However, I also suspect that it will bounce back later during the week.