Ethereum, the second-largest cryptocurrency by market cap, is exhibiting signs of continued bearish momentum after breaking crucial support levels. As detailed in recent trading activity, ETH's journey below the $2,500 benchmark signals potential further downside. The total crypto market saw over $162 million in liquidations, reflecting a risky environment for leveraged positions.
In the latest trading sessions, Ethereum tested and briefly approached the $2,400 support level. After failing to maintain above the $2,620 mark, ETH faced extended losses, mimicking the overall bearish sentiment mirrored in Bitcoin's recent performance. Currently, Ethereum hovers at $2,474.8, with the 24-hour price action showing tentative signs of a recovery attempt. As Ethereum trades around the $2,500 level, it marks an 11% decrease over the past week, highlighting increased volatility and bearish pressure.
The Ethereum price analysis on a daily timeframe chart shows a nuanced picture of ETH's current market dynamics and potential future trajectories. As observed, Ethereum's price is navigating through a critical juncture, evidenced by its interaction with key technical levels and indicators.
Currently trading just above $2,470, the price resides near the lower boundary of the Bollinger Bands (BB). This positioning often suggests a potential oversold condition, which might attract buying interest, particularly if the market perceives this level as a strong value zone. The narrowing of the Bollinger Bands further indicates a period of decreased volatility, which often precedes a significant price movement as the market consolidates and traders align on the cryptocurrency’s value.
Diving deeper into the momentum indicators, the Relative Strength Index (RSI) hovers around 41.17, edging closer to the oversold territory but without fully entering it, which suggests a cautious sentiment among traders. This level of the RSI points to a lack of strong buying momentum currently, which might require external catalysts or market developments to shift.
Additionally, the Moving Average Convergence Divergence (MACD) confirms the cautious sentiment, showing a bearish crossover with both the MACD and signal lines descending below the zero line. Although this typically indicates prevailing bearish momentum, the decreasing length of the histogram bars could hint at a slowing down of selling pressure, potentially setting the stage for a stabilization or mild recovery in prices if supported by positive market news or shifts in broader economic conditions.
Ethereum's immediate resistance lies at the $2,550 level. A convincing move above this could push prices towards $2,620 and potentially $2,660. However, the current market structure suggests that these levels might be challenging to breach in the short term.
On the downside, Ethereum has initial support around $2,420, followed closely by $2,400. A break below this zone could see the price slide towards the $2,320 area, where some buying interest might emerge. Critical support below this is found at $2,250, and further losses could target the $2,110 support level.
In a remarkable example of funds shifting, one of Ethereum co-founders, Vitalik Buterin, sent to foreign exchange swap-connected wallets close to $10 million worth of Ethereum (ETH) during the month of August this year. This transaction has really and widely raised eyebrows over any possible ulterior reasons coming from Buterin in the cryptocurrency space.
More details from Arkham Intelligence reveal that there is a continuous outflow of INSF ETH out of this address whereby insignificant amounts are left. This address has captured all the ETH that has been sent to Vitalik Buterin, which has been about 422,000 ETH worth around $ 1.04 billion as of September 1, 2024. In the last 2 years only, over 840,000 ETH have been transferred away from this address.
Such engagement has generated speculations that Buterin may be selling off some of his holdings in order to take advantage of the current bull run (the price of Ethereum is up 180% from its local 2022 low of $885. Such speculations suggest how vulnerable the cryptocurrency exchanges are to actions made by a certain circle of people, not to mention their role in shaping how much Ethereum would be valued and how positive or negative investors’ views will be.
The overall developed market outlook remains pessimistic as depicted with recent statistics where substantial amounts of cash have been withdrawn from the Bitcoin ETFs and bearish funding rates recorded for Bitcoin Futures. Such a view is expected to be affecting Ethereum as well.