Over the last month, Ethereum [ETH] has witnessed an increase of 18.56%, emphasizing a bullish trend. However, there has been a commencement of a 3.63% decrease, and this downward trend is projected to intensify briefly before Ethereum discovers a level of support.
Current market sentiment and technical indicators continue to support a potential upsurge once this period of consolidation comes to an end, maintaining a positive long-term perspective.
Minor downturn might drive ETH to unprecedented peaks
At the present moment, ETH is showing a downtrend, briefly making contact with a Fibonacci retracement line that is presently functioning as a support level.
The support level, marked by the Fibonacci retracement tool at $3,028.87, is anticipated to offer only temporary respite from further price drops.
In the scenario where ETH breaches this level, the subsequent target would be a slight decline to $2,900.87, indicating a 50% retracement from its overall surge. This level holds significance as it has triggered Ethereum’s recovery on four distinct occasions, including two substantial upswings.
If this support level remains robust, Ethereum’s bullish momentum could be rekindled, paving the way for a likely advance towards a target of $3,971.02.
Crucial indicators point towards selling pressure
ETH is potentially on the verge of a price decline as various paramount metrics converge, pointing towards heightened selling activity. The current support level of $3,028.87 suggests an impending downward trend.
One significant catalyst is the positive exchange netflow, with more than 32,600 ETH recently transferred to exchanges, possibly for liquidation. This influx typically signifies an escalation in selling pressure, constraining the asset’s potential for further advancement.
Another critical aspect is the rapid surge in active addresses. Historically, when spikes in activity align with price downturns, it indicates that a majority of these addresses are likely involved in selling rather than buying.
Taken together, these combined metrics suggest that Ethereum is anticipated to breach its present support level, triggering a short-term price decline.
Temporary nature of anticipated Ethereum decline
Recent data from the Exchange Reserve reveals that the decrease in Ethereum’s price is influenced by an upsurge in circulating supply on exchanges, which typically contributes to selling pressure.
Nonetheless, while a decline seems inevitable, it is likely to be transient. The marginal daily and weekly upticks in the Exchange Reserve stand at 0.03% and 0.32%, respectively.
If this pattern persists, the support level at $2,900.87 is projected to serve as a significant attraction point, acting as both a target for the ongoing decline and a potential springboard for the upcoming rally.