Ethereum Price Analysis: Potential for Another Drop Below $2.5K?
Ethereum is currently undergoing a consolidation correction phase, retracing towards the previously breached lower boundary of a multi-month wedge pattern. This movement indicates a potential pullback to the earlier broken level, suggesting a continuation of the bearish trend in the days ahead.
Analyzing Ethereum’s daily chart reveals that the cryptocurrency is in a corrective phase, with price action hinting at a potential pullback towards the wedge’s lower boundary at $2.8K. Following support near the critical $2K level, ETH initiated a bullish retracement back towards this key resistance zone. However, this area is likely congested with supply, leading to increased selling pressure.
Failure to surpass the $2.8K mark would confirm the pullback’s completion, signaling a continuation of the initial bearish trend. Key levels to monitor this week include the $2.8K resistance and the $2K support.
On the 4-hour chart, Ethereum’s consolidation phase is more evident as the price retraces towards the $2.8K resistance. Currently within a crucial range, between the 0.5 ($2.6K) and 0.618 ($2.7K) Fibonacci levels serving as significant resistance, ETH has also formed an ascending wedge pattern, a bearish continuation formation with potential for a downward breakout.
If the price fails to breach this resistance zone and drops below the wedge’s lower boundary, the bearish trend is likely to extend towards the $2K support level. Close monitoring of Ethereum’s price action in the upcoming days is essential for anticipating its next move.
Following a recent bullish retracement in Ethereum’s price, market participants are uncertain about the sustainability of this upward movement. Analyzing the futures market, specifically the Taker Buy/Sell Ratio, provides valuable insights into current market dynamics.
The Taker Buy/Sell Ratio measures the aggressiveness of buyers versus sellers in executing orders. After facing rejection at the $3K level, Ethereum witnessed a cascade in the Taker Buy/Sell Ratio, indicating a substantial volume of market sell orders. Despite a recovery during a subsequent bullish corrective phase, the ratio remained near zero, suggesting a lack of strength in the bullish move. The failure to reclaim previous levels implies that sellers retain dominance.
The declining ratio indicates that sellers are likely gearing up to push Ethereum’s price lower. Unless there is an unforeseen surge in demand, the current trend indicates a potential continuation of bearish pressure in the days ahead.
