Ethereum’s price has been facing a downward trend lately, particularly after facing a second rejection at the $4,000 resistance level. The daily chart reveals a pattern of lower highs and lows since failing to break above the $4,000 level. Additionally, the market has broken below the 200-day moving average, currently positioned around $3,100. Despite the price retesting the 200-day moving average, it appears to be facing rejection towards the downside. Given this scenario, there’s a likelihood of the cryptocurrency dropping towards the $2,700 support level in the near future.
Short-Term Predictions
An analysis of the 4-hour chart provides a closer look at the recent price action. The downtrend has intensified, briefly breaching the $3,000 support level. However, following an oversold signal by the RSI indicator, the price managed to bounce back above the mentioned support zone. Nevertheless, there seems to be a lack of momentum for further upward movement, hinting at a possible deeper decline towards the $2,700 region.
Capitulation Indicators
Amidst Ethereum’s recent downtrend, analysts have been on the lookout for signs of capitulation that could signify a potential bottom. One of the indicators being monitored is the Ethereum Exchange Reserve metric, which measures the amount of ETH held in exchange wallets. An increase in this metric suggests potential selling pressure, while a decrease indicates a reduction in supply. Following the brief dip below $3,000, the exchange reserve metric has shown an uptick above its 30-day moving average. This surge could signal the beginning of a capitulation phase, as many investors had set their stop losses below the $3,000 mark.
Ethereum’s price movement indicates a bearish trend, with potential further downside towards the $2,700 support level. The lack of momentum for upward movement, coupled with signals of capitulation, suggests a challenging period for Ethereum in the coming days. Traders and investors need to carefully monitor the price action and key levels to make informed decisions.