Crypto Crash: Ethereum and Cardano Reverse Early Gains – Is ETH Falling to $1,000?

The market crashed right after the news, sending most tokens near their Sunday lows as tensions between the two countries continued to escalate.

As a result, ETH has now lost 6% of its value in the past 24 hours and it is rapidly approaching the $1,400 level while ADA has gone down by 2%.

Although the sell-off looks awful on the lower time frames, trading volumes are still not as high as they were yesterday during the recovery.

This may indicate that the news may not have the necessary strength (for now) to push these assets below their recent lows.

However, market sentiment remains heavily depressed as the Fear and Greed Index currently stands at 19, meaning that investors are in Extreme Fear.

Crypto liquidations in the past 4 hours have now surged to $136 million, of which $122 million correspond to long positions being flushed out as a result of this unexpected drop. In total, $46 million worth of Ethereum longs have been put out in the past 24 hours.

Negative Momentum Reaches Extreme Levels

We have been tracking this daily chart for a few days now, as Ethereum’s Relative Strength Index (RSI) in this time frame has entered oversold levels.

The past three times that Ethereum has seen its RSI step out of these technical extremes, it has rallied to the $4,000 area.

The RSI currently sits at 24.6. The lowest it has gone in the past three times is 20. Although the price could go much lower, long-term buyers may want to step in here to buy some ETH at a bargain price.

The next key support to watch for ETH would be the $1,350, which is probably where the price action is heading at this point.

Can this be Ethereum’s near-term bottom? Macro conditions are quite bad at the moment but, from a technical standpoint, with technical indicators already stretched to their extremes, this price level may be a local bottom for ETH.

If this downtrend ends up pushing ETH below the $1,000 level, nearly $360 million worth of collateral positions within the Ethereum DeFi ecosystem could be liquidated, meaning that the selling pressure would increase.

ADA Risks a 30% Drop if It Loses Its $0.50 Support

Cardano (ADA) bounced strongly off what was our initial bearish target for the token at $0.515 a few days ago after two bearish patterns were confirmed by Sunday’s price action.

Despite this technical rebound, bears are still in control of the price action as reflected by momentum indicators. The RSI is now at a 23% distance from the signal line, meaning that negative momentum has accelerated.

Meanwhile, the MACD’s histogram shows three consecutive dark red bars, which also confirm a bearish outlook for the token.

If ADA breaks below $0.50, this could result in a 30% drop from current levels based on the size of the bearish pennant’s pole – one of the bearish patterns that are currently in play.

This is just an estimate as there are no support areas down the road for ADA on this higher time frame, meaning that bears will do their best to push the token to the lowest possible price.