Ethereum[ETH] has witnessed a considerable drop in value in the past 24 hours, reversing a large portion of the gains it had made in the preceding week. Data suggests that Ethereum is facing considerable selling pressure, which may result in continued downward movement if the price fails to stabilize at crucial levels.
Decline in Ethereum’s Value
An evaluation of Ethereum’s price movement on a daily chart reveals that the week commenced with a significant downward trend, resulting in a 4.21% decrease by the market close on September 14th, bringing the price to approximately $2,316.
At present, Ethereum is still on a downward trajectory, trading at around $2,300 and experiencing a decrease of less than 1%.
If Ethereum persists in following its current trajectory, it might test the next support level at $2,224, a level where it found support following similar downturns in the past. If the downward pressure continues, the subsequent critical support level lies around $2,168, which could be a pivotal zone to monitor.
Moreover, Ethereum remains in a bearish phase, evident from its Relative Strength Index (RSI) hovering around 40, signaling a potential weakening in buying momentum as it nears the oversold region.
Increased Selling Pressure on Ethereum
An analysis of Ethereum’s exchange netflow in the last five days illustrates a consistent pattern of positive netflows, starting with a notable inflow of over 105,000 ETH on September 12th.
The positive netflow indicates a rise in ETH being transferred to exchanges during this period, typically associated with heightened selling pressure.
The continuous positive netflow indicates that traders are moving ETH to exchanges, possibly for liquidation or sale. This sell pressure significantly contributes to Ethereum’s struggle in maintaining its recent price surge.
Furthermore, a scrutiny of trade volume in the last trading session pointed to a decline to approximately $7 billion, indicating reduced trading activity. The comparison of volume trends with price trends suggests that sell volume has outweighed buy volume.
Currently, based on Santiment data, the trade volume has surged to over $14 billion as of now, doubling from the previous session. Yet, it remains uncertain whether the increased volume is driven by buyers or sellers and which side will dominate.
Insights from Key Holders for Future Price Movement
Data from IntoTheBlock reveals that more than 1.7 million addresses hold Ethereum around the current price level, collectively possessing close to 53 million ETH, indicating the significance of the current price zone as a crucial support level.
As of the latest update, these holders are at a neutral position, where they are neither profiting nor facing losses.
If Ethereum’s price drops below this crucial level, these addresses might resort to panic selling to prevent losses. Given the substantial volume of 53 million ETH, any widespread sell-off could lead to a noteworthy price decline.
However, maintaining this price range could potentially help Ethereum avert further depreciations.