The price of ether has plunged to a 19-month low, briefly dipping just above $80, marking a dramatic 94% decline from its all-time peak in January of the same year. This steep correction underscores the intense bearish pressure engulfing the cryptocurrency markets, particularly for Ethereum, the second-largest digital asset by market capitalization.
As of the latest data, ether (ETH) was trading at $83.00, reflecting a 17.8% drop over the past 24 hours. Just three weeks prior, there were signs of a potential bullish reversal as prices flirted with the $200 mark. However, that optimism quickly faded as key technical support levels failed to hold.
Breaking Down the Price Collapse
According to CoinDesk's Ethereum Price Index (EPI), ETH/USD hit a low of $81.30 at 02:15 UTC—its weakest level since May 2, 2017. The breakdown below $200 on November 14 signaled a resumption of the downtrend, further accelerated by bitcoin’s own collapse beneath the critical $6,000 threshold. As BTC faltered, broader risk aversion took hold across crypto markets, dragging down altcoins like ether in a sweeping sell-off.
Since the November breakdown, ether has lost nearly 60% of its value. From its record high of $1,431 in January, the asset has now shed an astonishing 94%, leaving investors and traders grappling with severely diminished confidence.
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Record Bearish Sentiment and Short Position Surge
Bearish sentiment has reached extreme levels, a trend clearly reflected in trading behavior. On the Bitfinex exchange, short positions for ETH/USD surged to an all-time high of over 340,000 contracts shortly before this report—up 183% in just three weeks. At the same time, long positions have dwindled to their lowest point since September 12.
This kind of extreme positioning often indicates oversold conditions and may precede a market bottom. Historically, such moments have occasionally preceded sharp corrective rallies as short-sellers begin to cover their positions. However, relying solely on sentiment extremes to predict a reversal can be risky without confirming technical or fundamental signals.
Key Technical Indicators Point South
On the weekly chart, ether formed a small doji candle the previous week—an initial sign of potential bearish exhaustion. Unfortunately, this pattern has since been invalidated by the fresh plunge to 19-month lows. More concerning, price has decisively closed below $102.20, the low point of that doji candle, confirming that the downward momentum from the $200 level has resumed.
Additional technical indicators reinforce the bearish outlook:
- The 5-week and 10-week simple moving averages (SMAs) are both trending downward.
- Ether has found no sustainable support above $100, increasing vulnerability to further downside.
- The next major support level lies at $59.00—the March 2017 low—which could now come into play.
Despite these negative signals, there are early hints that selling pressure may be nearing exhaustion.
Signs of Potential Reversal on the Horizon?
The 14-week Relative Strength Index (RSI) has entered oversold territory for the first time since December 2016. While oversold conditions don’t guarantee an immediate rebound, they do increase the probability of a corrective rally, especially if triggered by external catalysts such as renewed institutional interest or network upgrades.
That said, the overall trend remains firmly bearish until clear evidence of reversal emerges.
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What Would Confirm a Bullish Turn?
A sustainable recovery would require ether to break its recent pattern of lower highs and lower lows. Specifically:
- A daily close above $128.00—the high reached on November 28—would invalidate the current bearish structure.
- Such a move could attract short-covering and trigger technical buying, potentially paving the way for a test of stronger resistance levels.
Until that threshold is cleared, traders should expect continued volatility and downside risk.
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Frequently Asked Questions (FAQ)
Q: Why did ether’s price drop so dramatically?
A: Ether fell due to a combination of market-wide risk aversion, bitcoin’s breakdown below $6,000, failure of key technical support at $200, and increasing short-selling activity on major exchanges.
Q: Is ether currently oversold?
A: Yes. The 14-week RSI has entered oversold territory for the first time since late 2016, suggesting selling pressure may be nearing exhaustion.
Q: What is ether’s next major support level?
A: The next significant support is at $59.00, which marks the March 2017 low. A drop to this level is possible if bearish momentum continues.
Q: Can ether recover from a 94% decline?
A: While steep, such recoveries have happened before. Ether previously rebounded from deep corrections in 2016 and 2017. A sustained recovery would require renewed investor confidence and bullish technical confirmation.
Q: What would signal a bullish reversal for ether?
A: A daily close above $128.00 would break the current bearish pattern and could trigger short-covering and technical buying interest.
Q: How do short positions affect ether’s price?
A: High short positions increase downside risk in the short term but also raise the potential for sharp upward moves if traders rush to cover their bets during a rally.
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Final Outlook
Ether remains in a deep bear market with significant downside risks. The path of least resistance is still downward, with potential testing of the $59.00 support level in the near term. However, extreme bearish sentiment, record short positions, and oversold technical indicators suggest that a corrective rally could emerge without warning.
While the macro outlook stays bearish for now, history shows that the most explosive bullish moves often follow periods of maximum pessimism. Traders should remain vigilant for signs of trend reversal—particularly a daily close above $128.00—as that could mark the beginning of a new cycle.
For investors and traders navigating volatile crypto markets, access to timely data and analytical tools is essential. Understanding sentiment shifts, technical structures, and macro trends can make all the difference between reacting too late and positioning ahead of major moves.