ETH technical outlook as crypto dumps

Ethereum price prediction after markets dump on multiple negative news.
The New York Attorney has sued KuCoin for selling unregistered securities and not registering as a broker-dealer.
Ethereum price could flip even lower if bulls fail to consolidate above $1,400.

Ethereum price fell below $1,400 on Friday morning as the broader cryptocurrency market bled amid several negative catalysts.

As the price of Bitcoin dumped below $20,000, ETH price tanked nearly 10% to $1,379 after rejecting at highs of $1,545 on major exchanges. Ether is currently trying to recoup losses above $1,400 but remains well under the crucial $1,450 resistance line. 

Losses over the past 24 hours now stand around 8%, while it’s -14% over the past week.

Ethereum price prediction: ETH, crypto markets dump on KuCoin news

Ethereum price’s declines followed a broader crypto market rot that’s been witnessed for much of the week. Selloff triggers have included Silvergate Bank and overall uncertainty across financial markets aftr this week’s Fed Chair Jerome Powell’s testimony at the US Congress.

On Thursday, more negativity crept into the crypto market after Silvergate announced it was winding down its crypto bank, spooking traders even further as ETH fell below $1,500.

But downside pressure picked up after the New York Attorney General Letitia James filed a lawsuit against cryptocurrency exchange KuCoin. The price of KCS, the native KuCoin token, fell after the news.

As CoinJournal reported today, the lawsuit claims that KuCoin has been selling crypto securities and has not registered as a broker-dealer in the state of New York. The lawsuit names ETH as one of the securities KuCoin illegally sold to customers.

“The petition argues that ETH, just like LUNA and UST, is a speculative asset that relies on the efforts of third-party developers in order to provide profit to the holders of ETH. Because of that, KuCoin was required to register before selling ETH, LUNA, or UST,” NYAG noted in a press release.

The lawsuit also alleges that KuCoin has sold unregistered securities to customers in the jurisdiction via its KuCoin Earn product. KuCoin Earn is a lending and staking product. 

The New York Attorney General’s office further complained that KuCoin had failed to register as a securities and commodities broker as required under law. As the market reacted to the news, Ethereum tanked – alongside other cryptocurrencies.

Ethereum price prediction: short term technical outlook

To the bulls first:

If sentiment flips positive and ETH/USD pops higher, the first major hurdle is near the $1,430 supply zone. Above that bids for $1,500 could push Ether prices to retest the $1,574 resistance level.

But as on-chain data from Glassnode shows, ETH open interest (perpetual futures) just hit a three-month low going back to 16 December. Using this as an indicator of what market sentiment is like and possible price trend, we could say the bears are showing strength.

📉 #Ethereum $ETH Open Interest in Perpetual Futures Contracts just reached a 3-month low of $763,589,131.87 on #Bybit

Previous 3-month low of $766,048,123.11 was observed on 16 December 2022

View metric:https://t.co/idKO9SSbFA pic.twitter.com/yPF66EG7Gz

— glassnode alerts (@glassnodealerts) March 10, 2023

On the technical front, ETH price broke below the 50 daily simple moving average (50 SMA) on 3 March, with the breakdown pushing prices beneath a key uptrend line. The cryptocurrency has also extended the rot seen over the past week to below the 200-day SMA.

Elsewhere, the relative strength index (RSI) indicator on the daily chart is just above the lower band to suggest a bearish continuation is likely.

It’s a technical picture that suggests a bearish strengthening in the short term, with a likelihood for major struggle for bulls at the critical support zone near $1,400-$1,380. Below that, it could be a nosedive to lows of $1,240, with $1,166 a target.

Here’s a chart showing the technical outlook for Ether.