Ethereum prices on the ETH/USD pair have suffered its biggest 1-day drop in history. The 40% collapse in price follows an unprecedented, relentless selling onslaught that seized the markets just as the New York session was about to open.
The total volume of liquidations is said to be at nearly $4billion, on what may become known as “Red Wed”. Ethereum price dropped below the $2000 mark and quickly found support at the $1935 price level. No one is sure what is going on, but this may not be unconnected to the recent crackdown on cryptocurrency trading announced by China on Tuesday, 19 May.
Ethereum currently trades at $2417 after a huge bounce. The largest cryptocurrency exchange Binance has suspended withdrawals on Ethereum and all ERC20 tokens temporarily due to network congestion.
Technical Levels to Watch
The steep slide in Ethereum this Wednesday has violated the 78.6% Fibonacci retracement mark very strongly. This retracement is traced from the swing low of 24 April to the 12 May swing high. If the candle closes below the 2622.00 psychological support (78.6% Fibo retracement) with a 3% downside penetration, he pathway towards 2140.46 is cleared. Below this level, further support is seen at 1935.79, 1800.00 and 1711.45. A breakdown of these price marks allows for a full retracement from the March 2021 lows.
On the other hand, bulls are looking for a bounce opportunity at the 2140 support, which allows the prcie to aim for the 14/23 April high at 2439.10. Above this level, 2622 comes back into the picture as a role-reversed resistance, with 2800 (29 April high), 3000 and 3160 all lining up as potential upside targets.