Ethereum has in the last 24 hours lost around 5%. This follows the financial markets’ jitters spread by a crashing oil market. The crypto market which was trading within resistance ranges felt the pressure with investors choosing to sell-off in case of a crypto crash.
This sell-off has seen a majority of cryptocurrencies shed off their weekend gains. For Ethereum, the largest altcoin has fallen back to its previous range of $170. Investors expect this range to hold as its set long term support.
Ethereum started the week slow after a strong bounce during the weekend that saw it test the $187 highs. At the time, the coin was setting up for a break above $190 and consequently $195 and $200. Failure to test $190 was going to lead to a violent retracement but one that would see it set a higher low. A wider market bearish trend has led Ethereum to fall to a bearish spiral leading it to revisit previous support ranges.
The drop will allow for bulls to further accumulate with Ethereum still looking strong. Prior to the current fall, Ethereum technicals were signaling further gains over the coming weeks with bulls’ eyes set at $200. Its current fall has been triggered by nervous investors watching the oil market.
Oil Crash Puts Pressure On Crypto
Bitcoin ‘the digital gold’ has also taken a hit since oil ‘black gold’ took a hit yesterday. Matthew Dibb, the co-founder of Stack, who was speaking to Coindesk, noted this about the crash;
“The downside in BTC is more likely attributable to losses in the equities market, which may be directly or indirectly affected by Crude prices, than the downward trend for crude directly,”
If the drop in oil is affecting the crypto market, this might persist for some time. The cause of oil dropping has been an oversupply in production with little demand and limited storage. The solution to this might take long with COVID-19 still limiting world economies and travel. This means further downside action for the crypto market for the short term at least.
As seen with the stock market, there is a relation between traditional markets and the crypto market which causes crypto to fall when they crash. Fortunately, we have also seen the crypto market decouple and set its own trend. Hopefully, this is the case with oil.