Ethereum is a native coin of the ethereum network that was created by vitalik buterin and which can be transfered from one smart contract address to another without involving a third party thus making it to be considered a decentralised asset. Initially, ethereum was using a proof of work consensus but later transformed to a proof of stake consensus in early 2020. On Monday the 18th of May , one ethereum started trading at around $217. By Tuesday the same week, the price had managed to drop to around $209.47 but later rises to 215.77 on Wednesday. . This downwards market movement has been as a result of traders behaviour which can further be explained as follows;
Traders behaviour
Ethereum has a huge community due to several dapps built on its network. This makes it to be able to be traded in an upwards and downwards direction and still makes traders to be able to profit from the market. When the ethereum market is trending upwards, that will be an indication that the sellers are more than the buyers. On the other hand, when the ethereum market is trending downwards, that will be an indication that the buyers are more than the sellers. Since Monday, the market was able to show a possibility of moving downwards which can further be explained as below;
1.Ethereum bearish analysis based on traders behaviour
In a bearish market, ethereum will be moving in a downwards direction. On Monday the 18th of May, one ethereum started trading at around $217. By Tuesday the same week, the price dropped to around $209.47.On wednesday the same week,the price rises again to $215.77 but later dropped to @211.93 the same day. This market movement is being indicated as from the candlestick chart below;
The above is the ethereum market in terms of USDT. Two points are being indicated. There is point A and B. Before point A, the market can be seen to be moving downwards all the way to $209.47 from its previous high of $217. This downward movement has been as a result of the buyers being more than the sellers. This causes the ethereum market to resist moving upwards but instead moves downward to $209.47 as stated above. More traders are starting to sell their ethereum in the hope that the market will continue moving downwards thus causing their ethereum holding to decline in value. This causes the ethereum market to gain an upwards pressure where it slightly moves upward to point A at around $215.77. At point A, more traders again start to buy more ethereum in the hope that the market for ethereum will continue moving upwards thus causing their holding to increase in value. This causes the ethereum market to experience an overbought condition thus causing the market to resist to continue moving upwards but instead reverse and moves downwards to point B at around $211.93. If more buyers will continue buying some ethereum in the hope of the market to continue moving upwards so that they profit, then there is possibility of the market to continue moving downwards all the way to $180. You can sell your ethereum at around $220. and wait to buy it again at around $180. Make sure to apply risk management so that to be safer.
Summary
Ethereum is a native coin of the ethereum network that uses a proof of stake consensus. On the ethereum network, there are so many dapps created there thus making it to be able to have a huge community thus can be tradeable in an upwards and downwards direction. When the ethereum is moving upwards, that will be an indication of an oversold condition while when it is moving downwards, that will be an indication of an overbought condition. Therefore, since the market was able to show a downwards trend on Monday, there is possibility of the market to continue moving downwards all the way to $180 From its previous high of $217. Sell and wait to buy again at $180
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