Technical outlook:
Ethereum dropped through the $1,134 lows during the New York session on Tuesday as risky assets turned lower against the US dollar. The above drop has been in line with the projections and discussions over the past few trading sessions. It should be noted that the drop might be incomplete and ETH could decline lower towards $1,040 before terminating the bearish wave.
Ethereum has already carved a larger-degree meaningful drop between $4,850 and $880 in the past several months. The above downswing might be the beginning of a much deeper drop but prices should retrace first, before resuming its downswing. Ideally, bulls will be back in control and push the price through $1,920 (initial resistance) and up to $2,400 going forward.
Ethereum has also successfully carved a potential lower-degree upswing between $880 and $1,280 as seen on the daily chart presented here. Prices are currently retracing the above upswing and might slip further towards $1,040 before reversing higher again. Also, note that $1,040 is close to the Fibonacci 0.618 retracement of the above upswing. Hence, there is a high potential for a bullish reversal from there.
Trading plan:
Potential rally towards $1,920 and up to $2,400 against $880
Good luck!
