Potential Impact on Ethereum (ETH) Price Rally if Bitcoin Falls Below $60,000

The current state of the Ethereum price is facing challenges in maintaining levels above $3100 as market sentiments take a bearish turn at the start of a new trading month. The ongoing trend shows a pattern of lower highs and lows, indicating the increasing dominance of bearish forces and a lack of stability in market dynamics. Similar to Bitcoin, Ethereum has also experienced price decreases, with efforts from bulls to defend lower support levels amidst the shift towards a bearish market stance.

Historical data suggests that Ethereum has consistently rebounded from levels below $3000 in recent times, highlighting a persistent demand for the token. However, the current market conditions hint at a potential dip below these levels, especially as the current candle is closing below the critical 200-day Moving Average (MA). This scenario raises concerns about another price reversal, potentially pushing the token into a bidding range.

The prevailing support area for the ETH price is crucial, and any breach of this level could trigger an extended bearish phase, possibly leading to a significant correction. The launch of the spot ETF has contributed to a more than 10% drop in the ETH price, accompanied by a decline in open interest by $250 million within a short timeframe. Failure to reclaim levels above the 200-day MA might signal further downside potential, with the price currently testing support at $3,160, indicating a looming breakdown and a probable drop below $3000 towards the range of $2902 to $2867.

Moreover, Ethereum transaction fees have notably decreased since March, plummeting from an average of $10 million to $3 million, while the Total Value Locked (TVL) in Ethereum has also seen a significant decline since May, reflecting reduced DeFi activity. The $3000 mark serves as a critical support zone, with approximately 1.24 million addresses holding over 3.69 million ETH tokens. However, stronger support lies around $2700, with 11.11 million addresses holding 59.07 million ETH tokens, indicating a more robust backing level.

In light of these developments, a potential rebound from $2650 to $2700 could be on the horizon, presenting the possibility of a reversal in the coming days. The market’s response to these critical levels will be crucial in determining the short-term trajectory of Ethereum’s price movement.