Ethereum: Reasons why ETH’s drop below $1,600 could be crucial for traders

ambcrypto.com:

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.

Over the past month, Ethereum [ETH] grew to set foot in the apex region of its long-term rising wedge on the daily chart. Post reversing from the upper band of the Bollinger Bands (BB), the king alt dipped below its 20 EMA (red) and 50 EMA (cyan).

The coin now stood at an important juncture. A potential rebound from the $1,603 support could aid buyers in preventing a continued downtrend. At press time, the alt was trading at $1,639, down by 5.16% in the last 24 hours.

Source: TradingView, ETH/USD

The buying pressure from ETH’s mid-June lows propelled a surge above the basis line (green) of BB. The altcoin saw an over 73% Return on Investment (ROI) from its 13 July low and snapped its vital $1,600-$1,700 range over the last week.

After swaying near the upper band of the BB for over a month, the recent selling resurgence pulled ETH below the near-term EMAs and the basis line.

Should the price action remain below the boundaries of the daily 20/50 EMA, the bears would look to expedite their edge in the coming days. So a convincing close above the 50 EMA could aid ETH in retesting the $1,730 zone. This trajectory could induce a low volatility phase near the EMAs.

Any decline below the $1,603 support could be interpreted as a selling sign. In which case, the $1,500 zone near the lower band of BB could provide near-term rebounding opportunities.

Source: TradingView, ETH/USD

The Relative Strength Index (RSI) fell below the midline to reflect a slight selling advantage. Traders/investors should watch for a revival towards the 50-level support to identify prospects of a bearish invalidation. A move near the