Ethereum’s price has experienced a significant drop recently, marked by a second rejection from the $4,000 resistance level. The daily chart indicates a pattern of lower highs and lows since the failed attempt to break the $4,000 level. Additionally, the market has broken below the 200-day moving average at around $3,100. Currently, the price is testing the 200-day moving average once again, but it appears to be facing rejection to the downside. This suggests that Ethereum may be headed towards the $2,700 support level in the near future.
A closer look at the 4-hour chart reveals an intensified downtrend in Ethereum’s price. The market briefly dropped below the $3,000 support level but has since bounced back above it after an oversold signal by the RSI. However, there seems to be a lack of momentum for further upward movement, raising the possibility of a deeper decline towards the $2,700 area.
Amidst the prolonged downtrend in Ethereum, analysts have been monitoring signs of capitulation that could indicate a potential bottom. One such signal is the Ethereum Exchange Reserve metric, which measures the amount of ETH held in exchange wallets. An increase in this metric suggests selling pressure, while a decrease indicates a decrease in supply. Following the recent drop below $3,000, the exchange reserve metric has surged above its 30-day moving average. This uptick may signal the beginning of the capitulation phase as investors with stop losses below the $3,000 level start to offload their holdings.
Ethereum’s price continues to face downward pressure as it struggles to break key resistance levels. The analysis of the daily and 4-hour charts points towards a potential drop towards the $2,700 support level in the short term. Additionally, the increase in the Exchange Reserve metric suggests that investors may be entering a phase of capitulation, which could further impact the price of Ethereum in the coming days. It is crucial for traders and investors to closely monitor these developments and adjust their strategies accordingly to navigate the volatile crypto market effectively.
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