Ethereum Price Update: ETH Faces Technical Warning Signal, $2.1K Target Looms
Ethereum has recently shown a significant bearish trend, characterized by a sharp decrease after a retracement to the lower boundary of a broken wedge pattern, along with the emergence of a death cross. Despite these indications, the price is edging closer to a critical support level that may result in a temporary sideways consolidation phase.
Analyzing the technical aspects, Ethereum has been experiencing a pronounced downtrend, causing apprehension and doubt among market participants. The minimal inflows into spot ETH ETFs have further emphasized this sentiment, indicating diminished investor enthusiasm and the presence of a death cross, where the 100-day moving average crosses beneath the 200-day moving average.
After being rebuffed at the lower boundary of the multi-month wedge and the 0.5-0.618 Fibonacci levels, Ethereum has sustained its decline, confirming the dominance of sellers in the market. Nevertheless, the price is nearing a crucial support area, delineated by the static $2.1K level and the 0.786 Fibonacci retracement level at $2,067. This zone is anticipated to attract significant demand, potentially leading to a brief pause in the downtrend, with a chance of sideways consolidation before Ethereum’s next trajectory is established.
On the 4-hour chart, ETH encountered strong resistance between the 0.5 ($2.6K) and 0.618 ($2.7K) Fibonacci levels, resulting in continued bearish momentum towards the $2.1K support level. This particular level has proven resilient in the past, notably in early August, suggesting it could draw buyers seeking to accumulate at these price levels.
Should demand revive at the $2.1K mark, Ethereum might undergo a temporary consolidation phase, alleviating the downward pressure. However, breaching this crucial support could trigger a prolonged liquidation event, potentially propelling the price towards the $1.8K region. The upcoming days will be pivotal in determining whether Ethereum can uphold this support or if a more substantial correction looms ahead.
Regarding on-chain analysis, Ethereum’s value is intrinsically linked to its decentralized network and user engagement. A key metric for assessing this engagement is the number of unique active addresses on the network, serving as an insightful proxy for Ethereum’s overall market demand and valuation.
The chart depicting the 14-day moving average of Ethereum Active Addresses illustrates a decline since late March 2024, signaling a reduction in user activity and transaction volumes. This downward trajectory mirrors a bearish market sentiment, with diminished demand and decreased investor involvement. To facilitate recovery and potentially initiate a sustained rally, this trend must reverse. A resurgence in active addresses would signify heightened interest and accumulation of Ethereum, indicating increased demand and the potential for a bullish market reversal.
