The digital currency Ethereum has witnessed a substantial drop in its value within the last 24 hours, undoing a considerable portion of the gains it had accumulated over the previous week. Data suggests that Ethereum is facing considerable selling pressure, potentially triggering further downward movement if the price does not stabilize at crucial levels.
Downward Trend of Ethereum
An examination of Ethereum’s price trajectory on a daily basis shows that it initiated the week with a notable decline, registering a 4.21% decrease by the market’s closure on 14th September, bringing the price to approximately $2,316.
As of now, Ethereum is continuing its descent, trading at roughly $2,300 with a minor drop of less than 1%.
If Ethereum persists in its current pattern, it might test the subsequent support level at $2,224, a point where it had previously found support following similar downturns. If the downward pressure lingers, the subsequent critical support level is about $2,168, which could emerge as a pivotal zone to monitor.
Moreover, Ethereum is still entrenched in a bearish trend, as evidenced by its Relative Strength Index (RSI) hovering around 40. This suggests that ETH is nearing the oversold region, indicating a probable weakness in buying momentum.
Heightened Selling Pressure on Ethereum
An analysis of Ethereum’s exchange netflow over the past five days reveals a consistent pattern of favorable netflows. The positive flow commenced with a considerable inflow of over 105,000 ETH on 12th September.
This flow indicates that more ETH has been transferred to exchanges during this period, a sign usually correlated with increased selling pressure.
The continuous positive netflow indicates that traders are shifting ETH to exchanges, likely for liquidation or selling purposes. This selling pressure stands as a primary reason behind Ethereum’s struggle to sustain its recent price surge.
Furthermore, an examination of the trade volume in the latest trading session depicted a decline to around $7 billion, highlighting reduced trading activities. The juxtaposition of the volume trend with the price trend implies that sell volume has outweighed buy volume.
As per the Santiment data at present, the trade volume has surged to over $14 billion, doubling from the previous session. Still, the determination of whether buyers or sellers are propelling the increased volume and which side will dominate remains ongoing.
Critical Insights from Key Holders Regarding the Future Price Trend
As per data from IntoTheBlock, there are currently over 1.7 million addresses holding Ethereum around the present price level, collectively possessing nearly 53 million ETH. This signifies that the current price range acts as a crucial support level.
At present, these holders are at a breakeven stage, implying they are neither in profit nor loss.
If Ethereum’s price plunges beneath this crucial level, these addresses might resort to panic selling to prevent losses. Given the substantial volume of 53 million ETH, a broad sell-off could trigger a significant price downturn.
Nevertheless, if ETH manages to sustain this price range, it could avert further declines.