Ethereum and Bitcoin underwent a strong drop the other day after days of consolidation. Ethereum slipped from the $590 region to lows around $550, marking a strong decline for the cryptocurrency that had benefited so much from the ETH2 launch.
Ethereum was falling alongside BTC. The market was seemingly dropping as a result of the U.S. dollar bouncing.
Fortunately, bulls have quickly retaken control of the crypto-asset market. One crypto-asset analyst noted that despite dropping yesterday, ETH held a pivotal level that may mean there are further gains ahead for this market.
Related Reading: Here’s Why Ethereum’s DeFi Market May Be Near A Bottom
Ethereum Defends Key Support Level
Despite yesterday’s drop, Ethereum actually held a pivotal technical level. A crypto-asset analyst known as “Pierre” shared the chart seen below earlier today, showing that ETH’s drop ended at a key support level.
The support level is one that has held since the start of November, prior to the rally from the $400 region to the year-to-date highs at $620.
The fact that Ethereum held this technically-important level may suggest that this market has further to gain in the weeks ahead.
Further, Bitcoin held a similar technical level on its own chart. This adds credence to the sentiment that the market will revert higher in the days ahead.
Chart of ETH's price action over the past few months with an analysis by crypto trader Pierre Chart: ETHUSD from CoinPrice.Watch
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Not Everyone Is Convinced
Not everyone is convinced that Ethereum will hold its current levels, though.
Ethereum’s recent drop brought it below a medium-term descending triangle, according to one trader. To the trader, this means that it is likely ETH drops toward $500 before it is to bounce:
“ETH: $500 potential bottom,” the trader explained while pointing to the chart seen below.
Image Courtesy of il Capo of Crypto. Source: ETHUSD on TradingView.
The trader that made this comment is the same one that at the end of 2019 predicted that Bitcoin would drop to the $3,000s in 2020. While it did not play out exactly as he expected, his prediction, which was disregarded at the time, came true.
While analysts are mixed about Ethereum’s outlook in the near term, the cryptocurrency is expected to maintain its medium-term bull trend due to DeFi growth and ETH2. More than 1.2 million ETH is now locked in ETH2, showing the market demand for this all-encompassing upgrade.
Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
Featured Image from Shutterstock Price tags: ethusd, ethbtc Charts from CoinPrice.Watch Ethereum Defends Pivotal Technical Level Despite Yesterday's Drop