Ethereum Price Outlook: Will It Reach $2k or $4k in August? What to Anticipate
Ethereum’s value held steady during Thursday’s trading sessions, with the cryptocurrency market stabilizing after a sell-off following the release of the Consumer Price Index (CPI) data. Despite a positive outlook, various factors, including a potential death cross, could hinder the upward trend in the third quarter.
The struggle continues for Ethereum’s price, as it might be on the brink of another decline towards $2,000 and below. This is evidenced by the decrease in derivatives volume and open interest on Coinglass. This decline could signify a period of consolidation after heightened volatility and a shift in investor sentiment following last week’s drop to $2,111.
The decrease in options volume is particularly significant for Ethereum’s price, indicating reduced speculative activity and potentially lower implied volatility. This could lead to less dramatic price fluctuations in the short term.
Ethereum currently finds itself between two crucial levels, with support at $2,060 marked by the 200-day Exponential Moving Average (EMA) and resistance at $2,817 established by the 50-day EMA and the 50% Fibonacci retracement ratio. The direction of the trend will be determined by a breakout on either side of this range, with a potential bearish outcome towards $1,500 if a death cross materializes.
A death cross occurs when a long-term moving average crosses below a short-term moving average, a pattern that may be confirmed as the 20-day EMA in the weekly timeframe trends downwards towards the 50-day EMA. Past instances of this pattern have resulted in significant declines, emphasizing its potential impact on Ethereum’s price.
The Relative Strength Index (RSI) downtrend and neutral position at 42 further support the bearish outlook, suggesting that Ethereum’s price is not yet oversold, giving sellers room for further movement before a potential reversal for a significant upward trend above $4,000.
Ethereum’s price has been moving within a descending channel since reaching $4,100 in March 2024. A potential recovery from the critical support level at $2,500 could validate a bull flag breakout, potentially propelling Ethereum to an all-time high later in the year. Traders should monitor key levels at $3,000, $3,500, and $4,000 to gauge the likelihood of a stronger upward movement.
Market sentiment seems to have improved following three consecutive days of daily net inflows into Ethereum ETFs for the first time since their launch. Data from SoSoValue indicates that all nine ETFs collectively recorded $10.77 million in inflows on Wednesday, reducing the cumulative total net outflow to $365.89 million.
