Ethereum Price Analysis: Is a Deeper Decline Coming?
Ethereum’s price has been on a downward trend recently, failing to break through the $4,000 resistance level. This decline has led some analysts to believe that a deeper drop is on the horizon.
Technical Analysis
The daily chart shows that Ethereum has been making lower highs and lows since its failure to break above the $4,000 level. The price has also fallen below the 200-day moving average, which sits around the $3,100 mark. Currently, the price is retesting this moving average, but it seems to be facing resistance. If this trend continues, Ethereum could drop towards the $2,700 support level in the short term.
The 4-hour chart offers a closer look at the recent price action. The downtrend has intensified, with the price briefly breaking below the $3,000 support level. However, an oversold signal from the RSI triggered a recovery above this support zone. Despite this, the lack of momentum suggests that Ethereum could be on the verge of a further decline towards the $2,700 area.
On-Chain Analysis
The Ethereum Exchange Reserve metric, which measures the amount of ETH held in exchange wallets, has been rising. This indicates potential selling pressure as traders move their ETH from exchanges. This increase in exchange reserve, especially after the recent dip below the $3,000 level, could be a sign of capitulation.
Conclusion
Ethereum’s price is currently facing significant headwinds, and a deeper decline towards $2,700 is a real possibility. The technical and on-chain indicators suggest that the selling pressure may continue. However, the situation is still volatile, and it’s difficult to predict the exact trajectory of the price. Traders should be cautious and monitor the market closely.
**Remember to conduct your own research before making any investment decisions.**
[Ethereum](https://ethereum.org/)
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