After briefly testing the $ 3,000 major support yesterday afternoon, Ethereum broke more frankly below that key threshold on Tuesday morning, as part of the widespread rout in the cryptocurrency market since yesterday morning.
Ethereum indeed hit a low at $ 2,812 last night, and maintains a distinctly bearish profile in hourly data on Tuesday morning, after ETH unsuccessfully attempted to climb back above $ 3,000, a threshold at see it as immediate resistance.
On the downside, the $ 2900 level and yesterday’s low towards $ 2800 are the first potential supports.
Looking back in daily data, we can see that ETH / USD fell below its 50-day moving average yesterday, after this indicator had alternately served as a barrier and support since May.
Widespread risk aversion impacts Ethereum and other cryptos
As for the reasons for the plunge in Ethereum, Bitcoin and most cryptocurrencies since yesterday, the explanation seems to lie in a widespread risk aversion movement, triggered by growing fears that the current debt of the Chinese real estate giant Evergrande does lead to a collapse.
The company reaffirmed that it could default on its debt, leading to a decline in other asset classes, including the cryptocurrency markets.
According to CNBC, Evergrande has undisclosed interest on bank loans due today. The company also has $ 83.5 million in interest owed on March 2022 bonds by September 23 and $ 47.5 million in interest owed on its March 2024 bonds by September 29. .
The decline in the cryptocurrency market and risk aversion can also be explained by a backdrop of lingering concerns over COVID-19 and anticipation of this week’s Fed meeting.