Should You Be Concerned About Ethereum’s Price Drop Below $2.9K?
Ethereum’s recent drop below $2.9k has raised concerns among traders, but there are reasons to remain cautiously optimistic. The market structure for Ethereum has been bearish, with the magnetic zone below $2.9k indicating the potential for further downward movement.
Recently, Ethereum was trading around the $2.9k support level, a level it revisited after hitting $3.5k in previous weeks. While network activity has decreased, smart money activity has shown a bullish signal. However, technical indicators continue to suggest a bearish outlook.
There is a possibility of short-term volatility and a potential dip below $2.9k for Ethereum. At the time of writing, Ethereum was valued at $2916, displaying a bearish market structure on the daily timeframe. The next significant support zone below $2.9k is around $2.6k, indicating the likelihood of a dip to that level.
The daily RSI is hovering just above oversold conditions, and the OBV has been on a downward trend since June, signaling further potential losses. Despite this, the $2.9k support level, which also coincides with the 61.8% Fibonacci retracement level, has been defended since April, providing hope for a bullish reversal.
Moreover, the presence of a cluster of liquidation levels around the $2.8k zone has increased over the past six weeks, making it a magnetic zone for prices. While $2.9k remains a strong support level, a visit to the $2740-$2800 region is highly probable.
In conclusion, a bullish reversal from the potential dip below $2.9k is anticipated, but traders should remain cautious of lower timeframe volatility. Establishing $2.7k-$2.8k as a support level alongside increased demand could signal an opportunity for swing traders to enter long positions. It’s important to note that the information presented is the writer’s opinion and does not constitute financial advice.
