Ethereum Price Update: Has ETH Hit Bottom After 37% Plunge?

After experiencing a sharp 37% decline, Ethereum saw a notable increase in buying activity around the $2.1K support level, sparking a bullish recovery. However, the current price movement indicates a potential completion of a pullback towards the lower boundary of the wedge at $2.8K, hinting at a possible continuation of the bearish trend.

Analyzing Ethereum’s daily chart reveals a strong bullish response near the critical $2.1K support level, leading to a swift surge. This surge highlights substantial demand around $2K, showcasing investor confidence in its long-term prospects. Nevertheless, Ethereum is now facing significant resistance, encompassing the previously breached lower boundary of the wedge and the crucial $2.8K mark.

This resistance zone could impede the upward momentum, potentially triggering a reversal back to the broken level. In such a scenario, Ethereum’s next objective might be the psychological $2K support level. On the 4-hour chart, Ethereum shows signs of recovery near the important $2K support level, resulting in minor corrective retracements.

However, the price has now entered a critical resistance area defined by the 0.5 and 0.618 Fibonacci levels. This region is anticipated to encounter heightened selling pressure and could serve as the primary target for the ongoing corrective movement. With this resistance in place, Ethereum is likely to face rejection and could continue its descent towards the $2K support level.

Nonetheless, if an unexpected bullish breakout materializes, the price could witness a strong rally, aiming to reclaim the wedge’s lower boundary and the pivotal $2.8K threshold. In terms of on-chain analysis, Ethereum recently witnessed a significant price drop, prompting speculation about the continuation of the bearish trend.

However, data from the futures market suggests a potential reversal on the horizon. Notably, Ethereum’s long liquidations, measuring the liquidation of long perpetual positions, have surged. In bull markets, such liquidation events are often followed by price rallies as the futures market stabilizes and spot buying pressure emerges.

The recent cascade of long liquidations, reaching levels unseen since November 2022, indicates a cooling off in the futures market, with leveraged positions being cleared out. Should demand resurge, Ethereum could be primed for another strong bullish upswing in the long run.