Over the last month, Ethereum [ETH] has seen a surge of 18.56%, signaling strong bullish momentum. Nonetheless, a downturn of 3.63% has commenced, with expectations of further decline before ETH stabilizes.
Despite the ongoing correction, market sentiment and technical indicators continue to support a probable upswing once this period of consolidation wraps up, maintaining a favorable long-term perspective.
Potential for ETH Upsurge Following Minor Downtrend
At present, ETH’s trajectory is downward, briefly touching a support level indicated by a Fibonacci retracement line.
The current support is identified at $3,028.87 by the Fibonacci retracement tool, poised to offer temporary respite from further price dips. However, a breach below this level could lead to a slight drop to $2,900.87, constituting a 50% retracement from its recent rally.
Historically, $2,900.87 has catalyzed ETH’s recovery in the past, marking a pivotal level that could reignite its bullish momentum towards a target of $3,971.02.
Indicators Point to Selling Pressure
ETH might face a forthcoming price decline as several key metrics converge, hinting at escalating selling pressure. The current support level of $3,028.87 indicates a potential downward trend.
One significant factor is the notable influx of over 32,600 ETH into exchanges for probable liquidation, reflected in the positive exchange netflow. This influx typically signals increased selling activity, limiting further upward movement.
Moreover, a surge in active addresses aligning with price declines historically suggests that most addresses are involved in selling rather than buying, further supporting the likelihood of a break below current support.
Temporary Nature of Ethereum’s Decline
Recent data from the Exchange Reserve indicates that the drop in ETH’s price is propelled by a rise in circulating supply on exchanges, contributing to selling pressure.
Despite the anticipated decline, it is expected to be short-lived. Daily and weekly upticks in the Exchange Reserve have remained minimal at 0.03% and 0.32%, respectively.
If this pattern continues, the $2,900.87 support level is likely to act as a key focal point, both for the current dip and as a potential springboard for the next upturn.