Ethereum Plummets 9%: A Look Ahead at ETH’s Future
Ethereum has experienced a significant drop in price, declining by almost 9% to trade at $2,460, down from its recent peak of $2,696 within just a day. This price movement closely mirrors the sharp downturn seen in Bitcoin (BTC) recently, causing a stir among cryptocurrency analysts who are now divided on what lies ahead for Ethereum (ETH), the second-largest cryptocurrency by market capitalization.
Some experts, such as Anup Dhungana, have raised concerns about the potential for further downside in Ethereum’s price. Dhungana has suggested that if the current downward trend persists, Ethereum could establish a double bottom pattern around the $2,200 support level. This pattern, often viewed as a bullish signal, indicates the possibility of Ethereum finding strong support at this price before potentially staging a rebound. However, the scenario hinges on Ethereum maintaining above the $2,200 support level to prevent further losses.
On the other hand, ‘The Cryptomist’ has offered a contrasting view, advising against overly bearish sentiments at this stage. The analyst highlighted the likelihood of Ethereum retesting its recent low but also pointed out the potential for a significant price increase with the upcoming monthly candle, suggesting a temporary rebound before any further declines, especially as the market awaits the closure of the monthly trading period.
Looking beyond technical analysis, Ethereum’s fundamentals present a mixed picture. Glassnode data indicates fluctuations in the number of active addresses over the past month, with a spike to 589,000 on August 14th followed by a gradual decline to 444,000 at present. This decrease in active addresses may signify weakening network activity, potentially exerting downward pressure on Ethereum’s price due to reduced network engagement.
In contrast, Ethereum’s Open Interest data offers a more complex narrative. Coinglass data reveals a 7.42% decline in Open Interest over the past day, amounting to $10.60 billion at present. Despite this decrease, the volume of Open Interest has surged by over 100%, reaching $38.97 billion, indicating heightened trading activity possibly driven by speculative responses to the recent price drop. Such increased trading volumes often lead to heightened price volatility, suggesting that Ethereum could witness further significant price movements in the near future.
