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HomeAnalysisEthereum's Price Plummets as Sellers Gain Upper Hand, But Support Zone Ahead...

Ethereum’s Price Plummets as Sellers Gain Upper Hand, But Support Zone Ahead May Curb Further Decline

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In a sudden turn of events, Ethereum’s price has taken a sharp nosedive after a brief consolidation near the critical $4K resistance level. The sudden selling pressure has led to a decline, but a significant support zone lies ahead, which may curb further downward movement.

According to technical analysis, the daily chart shows that the recent consolidation near the pivotal $4K resistance level was met with heightened selling activity, resulting in a notable rejection. This indicates strong selling interest around the previous major swing high of $4K, highlighting aggressive short positions near this key level.

Source: TradingView

However, a significant support zone lies ahead, including the 100-day moving average at $3,430 and the 0.5 Fibonacci retracement level at $3,419. This suggests that the current price action may continue its bearish retracement in the short term, with the 100-day moving average and the 0.5 Fib level acting as primary support for buyers.

Source: TradingView

The 4-hour chart also reveals a head and shoulders pattern, indicating a lack of bullish momentum and an increase in supply. The recent break below the neckline of this formation further emphasizes the bearish scenario. Additionally, a bearish divergence between the RSI indicator and the price further highlights seller dominance, raising concerns about Ethereum’s future trajectory.

Currently, the price is at a critical support level of around $3.6K. If sellers manage to breach this pivotal level, continuing the bearish trend is the most likely outcome.

Source: CryptoQuant

Sentiment analysis also suggests that the majority of futures traders have been selling Ethereum aggressively, with the 7-day moving average of the Taker Buy Sell Ratio declining sharply in recent days. This trend suggests that the current downward retracement could persist if this trend continues.

While the short-term outlook appears bearish, the significant support zone ahead may curb further downward movement. Traders and investors will be closely watching the price action to determine the next course of action.

Source: CryptoPotato

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