Ethereum’s price has been dropping consistently over the past couple of weeks and is yet to show any sign of recovery.
As things stand, a deeper decline could be expected in the coming weeks.
Technical Analysis
By Edris Derakhshi (TradingRage)
The Daily Chart
On the daily chart, the asset has gradually decreased after breaking the 200-day moving average, located around the $3,000 mark, to the downside.
The $2,700 level has also been lost, and the market could now target the $2,350 support zone. Yet, with the RSI entering the oversold region, a bullish pullback might occur soon, which could even put an end to the downtrend if the market can recover above the 200-day moving average.
The 4-Hour Chart
Looking at the 4-hour timeframe, it is evident that the price has been consolidating inside a tight descending channel around the $2,700 level. Currently, the market is testing this level from below, and if it gets rejected, a breakdown of the channel and a drop toward the $2,350 level would be imminent.
However, if the opposite scenario occurs and the $2,700 level is reclaimed, a rally toward the key $3,000 area would be likely.
On-Chain Analysis
By Edris Derakhshi (TradingRage)
Exchange Reserve
While Ethereum’s price has been experiencing an aggressive downtrend, things might be looking attractive for long-term investors who like to buy the dip. This is somehow evident when looking at the Ethereum exchange reserve.
The metric measures the total amount of ETH that is held in exchange wallets. It is considered a proxy for supply, as these coins can be quickly sold and add to the overall selling pressure.
As the chart suggests, however, the exchange reserve has recently taken a nose dive following the recent market crash. This indicates that some investors are aggressively accumulating during this correction, and the subsequent supply shrink could lead to a recovery.
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Cryptocurrency charts by TradingView.
