Ethereum Edging Lower

2020年10月9日

Ethereum (ETH) experienced strong growth this summer, mostly due to its network hosting dozens of DeFi tokens which grew tremendously. ETH then experienced a particularly sharp 30% correction, along with the entire market, about one month ago. The coin is now hovering around the $315-$340 support.

Lower Volatility
Following the crash, Ethereum experienced a period of reduced volatility, which we can observe through the Average True Range. The Average True Range (ATR) is a volatility indicator that determines the typical value range of an asset for a particular candle. For example, if we are using the 4-hour chart on Ethereum, and we have an ATR with a value of 4, then the expected range for that particular candle is $4.

The Cryptohopper ATR is a variant of the ATR indicator that adds a 28 period moving average. If the ATR is above the moving average, then the market is considered to be volatile. If the ATR is below the moving average, then the market is not volatile. Ever since the market crash, the Cryptohopper ATR has mostly indicated low volatility. Therefore when trading in the current market, it is better to keep your profit target tight and make small but consistent gains.

What Happens Next?
Ethereum is currently at support and may bounce back. However, for a bounce to occur, there needs to be substantial volatility along with the upward momentum. Therefore it is essential to keep an eye on the ATR when taking a position.

The first resistance level stands around $390. The next resistance stands at $485, which is this year’s high.

If the market takes a turn for the worse and breaks the current support, we could see Ethereum head to $250. This was the resistance level broken by the DeFi bull run earlier this year.