After a period of stability, Ethereum (ETH) has experienced a significant drop in price, falling below key moving averages and signaling a bearish trend. The rejection at the critical level of $1.8K has led to a cascade effect, with the price now hovering around the $1,650 support level.
Technical analysis of the daily chart reveals that the breach of the 100-day and 200-day moving averages, situated at $1,835 and $1,800 respectively, is a bearish signal. When the price resides below the 200-day moving average, it is generally considered a bearish phase.
On the 4-hour chart, it is evident that the breakdown below the static support at $1.8K has intensified the decline. However, the price has found some support at the $1,650 level, and the Relative Strength Index (RSI) indicator suggests the potential for a short-term consolidation phase.
Analyzing the on-chain data, there has been a noticeable decline in the interest of asset management funds to indirectly invest in Ethereum since June 2022. This trend contrasts with Bitcoin, which has seen periods of increased demand and fund distribution. The reduced engagement of these funds in Ethereum has led to diminished trading liquidity and overall interest in the market.
To experience a sustainable price upswing, Ethereum needs a steady rise in investment interest from these funds. The decline in fund engagement should be approached cautiously, as it may impact the future trajectory of the market.
In conclusion, if the drop in price continues, the next target for Ethereum could be a retest of the $1,400 level in the upcoming weeks. Traders and investors should closely monitor the support at $1,650 and the resistance around $1.8K for potential market movements. The market’s reaction to these levels will provide valuable insights into the future direction of Ethereum.
Note: The content provided is for informational purposes only and should not be considered financial advice.