- Ethereum, like Bitcoin, is facing a bout of consolidation as it trades below its crucial near-term resistance
- This level has held strong throughout the past several days, and each attempt to break above $400 has been met with an influx of selling pressure
- One result of this consolidation phase has been the emergence of multiple bearish signals that all point to imminent downside
- Analysts believe that unless ETH gains ground against BTC, it could be forming a local top on its USD trading pair
- This could mean significant downside is imminent
Ethereum and the entire cryptocurrency market has been stuck within a consolidation phase throughout the past few days.
This comes as Bitcoin struggles to break above $12,000 and as ETH remains below $400.
Until these levels are firmly shattered by bulls, the recent uptrend remains on hold. Overnight, buyers of both cryptos did attempt to break these levels, but it once again resulted in a rejection.
Analysts are now noting that Ethereum may be forming a local top while looking towards its USD trading pair.
It can still invalidate this bearish pattern, however, if it is able to gain ground against Bitcoin.
Ethereum Struggles to Rally Higher as $400 Resistance Mounts
At the time of writing, Ethereum is trading down just under 1% at its current price of $393. This marks a slight decline from daily highs of $399 that were set yesterday when buyers tried to shatter the resistance that sits at $400.
From this point onwards, the crypto has been vying to hold above $390, which may be a near-term support level.
Where ETH trends next may depend largely on whether or not Bitcoin is able to break above $12,000.
While speaking about the crypto, one analyst recently offered a chart showing that he expects it to see a downside movement to $367 before it is able to push any higher.
This target is highlighted on the chart seen below, and it appears he expects upside to follow.
Image Courtesy of Chase_NL. Chart via TradingView.
Trader: ETH May Be Forming a Local Top as Signs of Weakness Emerge
While speaking about the cryptocurrency’s near-term outlook, one analyst explained that he is watching a few potential signs of weakness that may indicate it is forming a local top.
“Ethereum – Potential early signs that the ETH / BTC chart is showing weakness. Reclaim of the white lvl would probably mean another 10%+ rally on the $USD chart. But if ETH / BTC doesn’t pick up steam, could be a local top on the USD chart,” he said.
Image Courtesy of Calmly. Chart via TradingView.
Because Ethereum and Bitcoin remain closely intertwined at the present moment, whether or not ETH forms a local top here will likely depend on BTC.
Featured image from Unsplash. Charts from TradingView.