Despite positive developments such as the launch of an Ethereum Spot ETF in the U.S, the leading altcoin has failed to reach new record highs, experiencing a 6.62% decline over the past week. Analysts suggest that this downward trend may persist as Ethereum looks for stability before a potential uptrend.
Potential Upward Movement in Ethereum Prices
Analyst Carl Runefelt’s analysis of ETH’s daily chart indicates that the coin is currently in a falling wedge formation, often a precursor to a significant price surge following a period of decline. The wedge typically reaches its lowest point, known as the support level, which for ETH seems to be around $2,200. Runefelt believes that if Ethereum bounces back from this level, it could rise by 80.47%, potentially hitting $4,000 and beyond.
Runefelt stated,
“Once a breakout occurs, there’s a strong possibility #Ethereum could rise back to $4K.”
To analyze the strength of the $2,200 support, CryptoCrypto conducted its own research.
Favorable Conditions for a Price Rally
CryptoCrypto’s analysis using IntoTheBlock’s In and Out of Money Around Price (IOMAP) tool revealed that the $2,200 zone is a significant area of buying pressure, with a substantial amount of ETH held in profit by addresses around $2,218.93. This could create strong support if Ethereum’s price nears this level.
However, the IOMAP also indicates a potential reversal around $2,281, highlighting a large volume of buyers at that price point. Information from Hyblock’s cumulative liquidation level delta suggests a bearish trend, with more short positions than long ones.
Anticipated Decline in Ethereum’s Value
Further analysis by CryptoCrypto indicates that ETH might be on the verge of a decline, supported by a drop in the OI-weighted funding rate recorded on Coinglass. The decreased rate signals a willingness among retail investors to push Ethereum’s price lower, potentially leading to a test of the $2,200 support level.
In conclusion, despite Ethereum’s recent price surge, traders remain cautious about its future trajectory, with indications pointing towards a possible downturn before any significant recovery.