Ethereum, Bitcoin, and Shiba Inu: A Market Correction Is Coming

The recent steep drop in Ethereum has dashed hopes for a long-term upswing. With a decline below its rising trendline, the cryptocurrency's upward momentum has reversed.

Ethereum’s recent steep decline has dashed hopes for a sustained upswing. The cryptocurrency’s upward momentum has reversed, with a decline below its rising trendline. This breakdown has pushed the asset below the crucial $2,500 barrier, with ETH now changing hands at around $2,400—a岌岌可危 level for the second-largest cryptocurrency by market capitalization.

The breakout below the $2,500 barrier is concerning, as it historically served as a crucial support zone. This breakdown might lead to further losses for Ethereum. The bearish outlook is further supported by the declining volume that accompanies this decline. Less buying interest is typically indicated by lower trading volume during a price decline, which could exacerbate the current downtrend.

However, the break below the ascending trendline is particularly worrying, as it signifies the conclusion of the recent rally that had provided hope to investors. This trendline is now acting as resistance, which could make it difficult for Ethereum to regain its footing in the near term.

Due to the shift in market sentiment, there is a growing probability for an extended bearish phase. Traders and investors should prepare for possible further downside as Ethereum remains around $2,400.

Bitcoin’s decline

In a concerning development, Bitcoin price has sharply declined to the 200-day Exponential Moving Average (EMA). This move is alarming, as it serves as an indication for an impending price correction and possible trend reversal, dashing the confidence of traders who were expecting a sustained rally.

Investors are becoming concerned as a result of a $200 million market wipeout. Such a substantial decrease in market capitalization could result in increased selling pressure and a possible price decline. It is alarming that Bitcoin has been unable to sustain above the 200 EMA, considering that it has historically served as a crucial support level.

To add insult to injury for BTC enthusiasts, the cryptocurrency has failed to clear the coveted $70,000 threshold during this market cycle. This level has been a key psychological target for traders and investors, and failing to reach it suggests a slowdown in bullish momentum. Judging by the recent price action, Bitcoin is in a precarious position.

If the price drops to the 200 EMA, it could indicate a market shift from bullish to bearish. A price breakdown below this level may lead to an extended downtrend, potentially retesting lower support levels around $55,000 or even $50,000.

Shiba Inu fails to rally

Shiba Inu, the once-unstoppable meme coin, now faces a critical juncture following a failed attempt at a price reversal. The cryptocurrency has encountered difficulty breaking above the 50-day Exponential Moving Average (EMA), a critical resistance level that, when breached, typically indicates a bullish continuation.

Concerns are being raised over the asset’s near-term prospects as SHIB’s failure to cross this threshold suggests a lack of buying support. The failure to breach the 50 EMA goes beyond a simple technical setback, as it reflects the overall market sentiment toward Shiba Inu.

This is highlighted even further by the decreasing volume, as the asset appears to be losing momentum and investors who were expecting a strong rebound may be reconsidering their positions.

Given the state of the market, there is a growing possibility for a significant reversal for Shiba Inu. If the asset remains weak below the 50 EMA, selling pressure from investors looking to cut their losses may intensify. This could trigger a downward spiral where the lack of buying interest accelerates SHIB’s decline, pulling it further away from recent highs.

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