Ethereum has seen some intense selling pressure in recent days, which has likely arisen as a result of the trend reversal in DeFi tokens.
Since the DeFi market is essentially built on top of Ethereum, the ETH token has been heavily impacted by the expansion of this sector.
That said, as yields start to decline across platforms and token prices drop, some investors seem to be offloading their Ethereum holdings in favor of Bitcoin, which has risen higher in recent days.
This trend has hurt ETH’s short-term outlook, hampering that of the entire altcoin market.
An analyst claims that until Ethereum overcomes its short term resistance and overcomes this slight downtrend, “altseason” will be delayed.
In some ways, ETH has become an index bet by DeFi, meaning whether or not it breaks its downtrend largely – or completely – depends on how this emerging sector of tokens trends.
Ethereum struggles to gain momentum as investors flock to Bitcoin
At the time of writing, Ethereum is marginally trading at its current price of $ 366. This is roughly the price it traded at all morning, with bulls and bears largely reaching a deadlock.
It is important to note that earlier in the day ETH plummeted to lows of USD 355, widely seen as the “last ditch” level of support to be ardently defended.
A hiatus below this level would be dire for the crypto’s near term outlook, but the strong reaction bulls posted on it indicate there is strong buying pressure here.
As long as Bitcoin remains stable or continues to climb higher – as it has done for the past few days – Ethereum is unlikely to see any serious technical glitches.
Analyst: ETH’s price action is likely to lead that of the entire Altcoin market
A popular analyst explained that as long as Ethereum stays below its main resistance area between USD 380 and USD 400, altcoins are likely to struggle to gain significant momentum.
He talked about the similarities between altcoins while referring to an Ethereum chart:
“The vast majority of altcoins look the same: 1. Mega dump 2. Scam pump 3. New test of previous support as resistance 4. Rejection. Altseason postponed until further notice. “
Image Courtesy of Teddy. Chart via TradingView.
Whether Ethereum can overtake Bitcoin and plow higher in the short term can have a major impact on both DeFi tokens and the crypto market.
Featured image from Unsplash. Charts from TradingView.