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Ethereum Daily Chart – Source: Tradingview.com

After a bullish outperformance since mid-December, Ethereum is undergoing a sharp drop today which has resulted in it dropping to the third position in the cryptocurrency rankings by market cap.

It has now been overtaken by Ripple’s XRP which also overtook Ethereum during the bearish market conditions of November.

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The drop in Ethereum quickly fell below an expected support level at $140.

$140 to $128 was an important area of liquidity for Ethereum during the November drop. Price is currently meeting some support at $128.

Ethereum 4-Hour Chart – Source: Tradingview.com

The drop took place after a head and shoulders pattern formed as seen above on the 4-hour chart.

Head and shoulders pattern is a bearish trend reversal pattern.

While price broke below the neckline of the head and shoulders pattern earlier in the week, price consolidated along with the rest of the market until today.

Bearish movements across the market catalyzed the current sharp drop being seen.

Key Takeaways:

  • Ethereum had been bullishly outperforming since mid-December.
  • A sharp bearish drop has resulted in Ethereum dropping to the third position in the cryptocurrency ranking by market cap with Ripple’s XRP taking the second position.
  • The bearish drop quickly broke through an expected support level at $140.
  • Some support is currently coming into play at $128.
  • A head and shoulders pattern preceded the sharp bearish move.

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