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Ethereum’s correlation to Bitcoin

For almost two months, Ethereum [ETH] investors have been disappointed. It was due to its failure to sustain a position above the basis line (green) of its Bollinger Bands (BB). Over the last four days, the after-effects of the recent Bitcoin rally have harmed ETH’s performance. The near-term bearish tendencies could be affected by a rally back from the $1218-mark support.

ETH showed a one-sided bearish control from a technical standpoint. Because sellers are aware of both the short- and long-term trends, ETH has been unable to show any early signals of a trend reversal.

Price activity has been swaying below the BB basis line for over two months, continually hitting new multi-month lows. In the previous six days, the largest alt has lost more than a third of its value.

Should a purchasing comeback be triggered by this 17-month support area, it might provide the bulls with a much-needed short-term push toward the $1400-zone. In addition, the oversold readings on the BB spoke at a possible rebound in the near future.

However, because to its high correlation to Bitcoin and high selling volumes, the alt may suffer a setback. Any closure below the $1,100 range would send ETH spiralling down to the $1,096 mark.

To avoid a further 6-8 percent drop, the bulls needed to come in and increase purchasing levels near the $1,173 support level. Any improvements in sentiment will help ETH’s efforts to return to the $1,350-$1,400 range.

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