In the last month, Ethereum [ETH] has faced a notable downward trend. Despite volatile fluctuations in the broader cryptocurrency markets, ETH has been particularly impacted by the existing market conditions.
At present, ETH is being traded at $2289, reflecting a 5.41% decrease within the past 24 hours.
While ETH had previously shown efforts to break free from the downward trend with gains on weekly charts, recent losses on daily charts have outweighed these gains.
Despite these challenges, an uptick in trading activities signals a glimmer of hope for ETH. In the preceding 24 hours, trading volume surged by 81.42% to $13.67 billion.
The surge in trading activities presents a potential positive outlook, but a significant sell-off by major holders could pose risks for further market correction.
Analysts have been actively discussing the current state of the altcoin, and Javon Marks, a prominent crypto analyst, is among them.
Despite the current struggles faced by ETH, analysts like Marks foresee a rally towards $4723.5, drawing comparisons to the cycle seen in 2023.
Interpreting the Market Sentiment
In his evaluation, Marks referenced the 2023 cycle where ETH witnessed a 165% increase for a rally.
Based on his assessment, the current market conditions echo those of the prior cycle, indicating a potential upward trajectory to $4723.5 if history repeats itself.
Furthermore, a breakthrough beyond this level could pave the way for historic highs of $8100, representing a twofold price surge.
The analysts note that during the “Go Time” levels observed previously, ETH demonstrated a sustained upward momentum for three consecutive months, reaching $2717 by January 2024 before encountering a downturn.
In general, market sentiment among analysts remains largely bullish, hinting at ETH’s possible attainment of a new all-time high.
Is Ethereum Poised for a Rally?
While Marks paints a promising picture that could see ETH achieve unprecedented highs, the recovery process for ETH faces the challenges posed by current market conditions.
Recent developments have witnessed the liquidation of long positions valued at $46.97 million and short positions amounting to $2.93 million within 24 hours, indicative of traders’ loss of confidence.
This mass liquidation of long positions, which represents investors expecting market recovery being forced out of their positions, underscores the prevailing apprehension.
Moreover, the decline in Ethereum’s exchange outflow from 679119.6 to 71794.34 over the last week suggests diminished accumulation by holders, indicating a preference for short-term asset retention.
Another bearish sign emerges from the reduced movement of assets off exchanges by fewer investors, implying a readiness to sell rather than hold for the long term.
Additionally, the Taker Buy Sell Ratio has decreased to 0.88 in recent days, underscoring a trend of aggressive selling rather than buying among investors.
In essence, the current market conditions do not favor an imminent price recovery for ETH. The increased selling activities highlighted by the Taker Buy Sell Ratio amidst a spike in trading volume suggest further descending movements.
Therefore, should the prevailing market conditions persist, ETH is likely to regress towards the next support level around $2114 before initiating another upward shift.