Ethereum price (ETHUSD) is down for the second consecutive ahead of the US election. It is trading at $378, which is 1% below its close yesterday. It is also substantially below last week’s high of $422.
Other digital currencies are also struggling, with Bitcoin Cash and EOS down by 6% and 1.40%, respectively.
The biggest concern among Ethereum investors was a sudden drop in the total value tied in Decentralised Finance (DeFi) yesterday. According to DeFi Pulse, the total value dropped to $8.33 billion yesterday. That was the lowest it has bee since September this year. As shown below, the value has bounced back to the current level of $10.
Ethereum is closely tied to the DeFi industry because most developers use the Ethereum protocol. Indeed, all the 44 projects listed by DeFi Pulse, including Uniswap, Maker, WBTC, and Compound are all built using Ethereum. Therefore, if there are problems in the industry, investors tend to react by selling their ETH holdings.
Ethereum price is also falling ahead of the US election. In their campaigns, the president and the former president have not said what they will do about the crypto industry. However, if Trump wins, investors expect the status quo to remain.
Most importantly, the price is under pressure after a whale dumped 4,000 ETHs into the market at a time when liquidity was at its lowest.
Ethereum price technical outlook
On the four-hour chart, we see that the Ethereum price has dropped from last week’s high of $421.40 to a low of $370 today. The price has also moved below the 28-day and 14-day exponential moving averages. The awesome oscillator has also moved below the neutral level. Most importantly, the price seems to have moved below the neckline of the head and shoulders pattern.
Therefore, I suspect that the price will continue falling, with the next support being at $350. On the flip side, a move above the psychological level of $400 will invalidate this trend.
ETH technical chart