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The meltdown is uniform across the crypto-sphere and as analysts, pundits and enthusiast air their view, sleuthing on the probable cause of this decline that have since wiped more than $50 billion in matter of days, it’s clear that ETH/USD is one of the worse performers in the last week. Not only have we seen losses below $200, $160 and now $150, but the lack of steel has seen the coin drop ranking to third as XRP climb to second absorbing price shocks.

As it stands, many are speculating that the cause of this draw down might be because of recent SEC foray into the space. While taking advantage of the 2017 DAO Report that demand that exchanges or any service providers dealing with the exchange of tokens viewed as securities register with the SEC, the agency went ahead and fined the founder of Etherdelta–Zachary Coburn– $383,000 for operating an unregistered securities exchange.

Up until these unexpected charges, the exchange acted as a secondary market for trading ERC-20 tokens via smart contracts on the Ethereum platform. Most of these tokens, the SEC said, were securities, but Etherdelta continued operating without registering or applying for an exemption from the regulator.

Weeks later the SEC went ahead and announced the first civil penalties on the founders of two crypto projects–Airfox and Paragon. These projects raised more than $10 million but the SEC claim they failed to register their offerings as securities but have no agreed to compensate harmed investors, pay up the $250,000 penalties and register as securities.

Overly, fundamental factors plus the drop of BTC prices are fueling this meltdown. At current prices, ETH/USD is down 36 percent in the last week but poised to print lower now that prices are trading within a bear break out pattern following events of the last week.

In line with our previous ETH/USD trade plans we had suggested taking a neutral stand as long as prices were trending inside a $110 range with caps at $160—lower limit and $250–$300 resistance zone.

Thus far, our trade conditions have been met and with high trade volumes accompanying the break below $160, conservative traders should execute in the direction of least resistance which is southwards. Moving on, we recommend selling on pull backs with first targets at $100 and later $50.

Back to the daily chart and the bear breakout pattern mentioned is clear. After two days of “hell”, it’s likely that ETH/USD would recover and perhaps retest the $160 resistance—previous support line.

Notice that bull momentum is building up in lower time frames and because of this we suggest taking a neutral stand and zoom out to the one-hour chart selling once a sell signal print. Ideal sell zone is around $150–$170 mark. Fitting stops will be at $170.

All Charts Courtesy of Trading View

Disclaimer: Views and opinions expressed are those of the author and aren’t investment advice. Trading of any form involves risk and so do your due diligence before making a trading decision.

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