Ethereum Analysis Validates Breakdown: Will ETH Price Revisit $2.8K Soon?

The digital currency market has shown a notable downward trend since the beginning of the week, indicating a rise in selling pressure compared to buying pressure. The primary player in the market, Bitcoin, has experienced a decline of around 3% in its price over the last 24 hours, signaling a pessimistic outlook.

In a similar vein, the leading altcoin, Ethereum, has mirrored this price movement by undergoing a correction of 4.38% in its value, accompanied by a trading volume of $18.61 billion. Given the prevailing market sentiments, the question arises whether the price of Ethereum will witness a bullish reversal or descend towards its critical support level of $2,800.

Analyzing Ethereum’s price dynamics reveals that the token has adopted a multi-pattern approach within its 1-day timeframe, persisting in trading within this framework for a brief period. Notably, Ethereum has been following a descending channel pattern since mid-May, reflecting an enduring bearish sentiment.

Despite this, amidst the heightened price volatility in the cryptocurrency sphere during July, the ETH token managed to establish an ascending channel pattern after successfully retesting its crucial support level of $2,800. Consequently, Ethereum formed a bearish diamond-shaped pattern on its price chart, with a recent breakdown occurring during the early trading hours.

Regarding market sentiments surrounding Ethereum, the Simple Moving Average (SMA) has consistently acted as a resistance on the 1-day timeframe price chart, indicating an escalation in bearish sentiment within the crypto domain. Additionally, the Relative Strength Index (RSI) has failed to surpass its neutral point, with its average trendline displaying a bearish curve, foreshadowing a negative trajectory for the altcoin leader in the days ahead.

Examining the market trend of Ethereum Spot ETFs, various entities such as Grayscale’s “ETH,” Fidelity’s “FETH,” and Blackrock’s “ETHA” have recorded significant inflows. Conversely, Grayscale’s “ETHE” has experienced an outflow of $133.3 million, contributing to an overall negative flow in Ethereum ETFs.

Looking ahead, if the market gains momentum, Ethereum’s price may target a retest of its resistance level at $3,300. With a growing bullish sentiment in the crypto space, ETH could potentially break out of its descending channel pattern and move towards its upper threshold of $3.7K. However, continued dominance by bears in the cryptocurrency market could lead to Ethereum’s price plummeting towards the crucial support level of $2,800 in the near term.