Analysts caution of further challenges for Ethereum as struggles intensify

Ethereum has been a disappointment for many investors this time around, particularly for those who anticipated it would surge to new heights alongside Bitcoin’s climb toward six figures. Instead, the cryptocurrency has taken a sharp turn, retracing back to price levels not seen in years. Despite experiencing notable losses, some analysts suggest that the worst might still be on the horizon.

One market analyst, known as TradeNation on TradingView, highlighted the $1,724 mark as a critical area of contention. This price point, now serving as a significant resistance after recent declines, is viewed as a potential battleground. If Ethereum manages to retake and maintain its position above this level, there may be a possibility of recovery, with potential upside targets at $1,840 and $1,926.

However, failure to uphold this line could lead to further pressure from bears, potentially pushing the price down to $1,409 or potentially even lower. A complete breakdown could pave the way for more substantial losses, with $1,350 and $1,265 identified as potential long-term support levels.

Currently, the momentum appears to favor the downside. Sentiment surrounding Ethereum has soured more rapidly than in the broader cryptocurrency market, putting it under increased scrutiny. The lack of bullish momentum has made it a prime target for doubt and apprehension. A continuation of this weakness could trigger additional liquidations and panic selling.

On-chain indicators echo this pessimistic outlook. Network activity on Ethereum is diminishing, with gas fees now hovering at levels last witnessed in 2020. Furthermore, some of the largest ETH holders have initiated the process of offloading their positions, with over 143,000 ETH reportedly moved within a single week. With diminishing network usage and mounting sell pressure from significant holders, Ethereum’s downtrend may still have room to persist.

As with any investment, caution and careful analysis are essential in navigating the volatile crypto market. Despite the current challenges facing Ethereum, some analysts are optimistic that the cryptocurrency may find its footing once again. However, until there is a significant shift in market sentiment and on-chain activity, Ethereum’s struggles may continue, potentially leading to further losses before any signs of recovery become apparent.