This week, the cryptocurrency Ethereum faces headwinds, with a notable slowdown in its upward progression. Indeed, its growth is starting to run out of steam as investors have recently become more attracted to its competitors like Solana and Avalanche. Result ? Ethereum price fell below $2,200. If this continues, we could even see it dip below $2,000.
Analysis of the current state of the Ethereum market
At the moment, the Ethereum (ETH) cryptocurrency market is crossed by a downward curve. While it seemed to be doing well a few days ago, even flirting with $2,330, it failed to stay above the $2,300 mark.
Lately, bear traders have taken advantage of the price stagnation to drag the price below $2,250 and even $2,220. More significantly, price broke below the 50% Fib retracement level of the recent rise from $1,980 to $2,330, highlighting the bears’ takeover, especially below the support at 2 $180.
Currently, Ethereum is trading below the $2,220 threshold and below the moving average simple over 100 hours. A downtrend line is also emerging, with resistance near $2,210 on the ETH/USD hourly chart. In the event of a rebound, the price could encounter resistance near $2,200, followed by stronger resistance near $2,210 and the trendline. Major resistance now lies at $2,250.
For a bullish reversal, a clean break above the $2,250 zone could propel the price towards $2,330, and potentially as high as $2,400. Further gains could trigger a push towards $2,550 and if the uptrend continues, Ethereum could testing the $2,750 level.
What caused the recent price drop of Ethereum?
The price of Ethereum is in freefall, and it looks like the cause is a mix of economic factors and market movements. At the moment, investors are a little lost because of the somewhat vague maneuvers of the American Fed.
The economy seems to look good, with GDP rising, but the Fed is treading water with interest rates while warning that rates could fall in 2024. This leaves everyone in question mark mode.
A giant whale withdraw 60K $ETH($131.76M) from #Bitfinex and deposited it into #Makerthen borrowed 58M $DAI 4 hours ago.
After swapping 58M $DAI to 58M $USDCthe whale deposited 58M $USDC to #Binance.https://t.co/1lcf7pGEyQ pic.twitter.com/CVUsHbSFdu
— Lookonchain (@lookonchain) December 18, 2023
And to make matters worse, an Ethereum whale has just dump a significant amount of ETH tokens. This, of course, doesn’t just make everyone happy and adds a layer of stress to the market. The move shook investor confidence, adding pressure to a market already in a downward trend.
Ethereum Growth Outlook
Technical analysis of the daily chart of Ethereum (ETH) reveals mixed signals regarding its future trajectory. Although ETH price has seen a recent regression from its year-to-date (YTD) high of $2,402 to $2,172, it maintains its position above the de critical support of $2,140, which corresponds to the peak of April 16.
This resilience above key support suggests some underlying robustness in the ETH market. Additionally, crossing the 50-day and 100-day exponential moving averages (EMA) indicates positive momentum for Ethereum in the medium term.
However, there are signs of caution. The relative strength index (RSI) and the stochastic oscillator, both oriented downward, signal a possible loss of momentum. This suggests the possibility of consolidation or a slight decline in the short term.
Nonetheless, the formation of a breakout and retest pattern, generally considered a bullish sign, portends that Ethereum could rebound and potentially retest its YTD high of $2,402.
However, if ETH fails to breach the $2,210 resistance level, we could see a continuation of the downtrend. Key support levels to watch on a downside include $2,135 and $2,080, the latter of which is near the 1.236 Fib extension level of the key upside.
A break below $2,080 could signal a major decline, even threatening to send Ether tumbling below the psychological threshold of $2,000.
XYZ Launchpad
The Launchpad XYZ project continues its pre-sale having passed the two million dollars raised. Available for a few more weeks, everyone can participate before the price increases with listing on various exchange platforms.
Launchpad XYZ aims to be a pillar of Web3 in offering its own platform allowing new technologies to be introduced to users while being able to benefit more from NFTs or even cryptocurrencies for example.
Sources: CoinMarketCap / Launchpad XYZ
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This article does not constitute investment advice in any way. The information provided here should not be used as a basis for making financial decisions. Cryptocurrency investments involve risks and may result in significant losses. You should only invest what you can afford to lose and carry out your own research before making any investment decisions.