ETH Drops to $3.3K, But Is More Pain Imminent?

Ethereum price is currently trapped within a significant narrow range, bounded by the 100-day moving average of $3364 and the 200-day moving average of $3212.

A break of this range will determine its next trajectory.

By Shayan

The daily chart

A close examination of Ethereum’s daily chart reveals that after a rejection near the crucial $3.5K resistance region, the price has plummeted to a substantial support zone.

This critical support includes the 200-day moving average of $3212, which serves as a solid line of defense for Ethereum buyers. However, the price is confined within a tight and crucial range bounded by the 100-day moving average of $3364 and the 200-day moving average of $3212. A break above this area will bring sufficient demand to the market, leading to potential upward momentum in the price.

Conversely, a break below the 200-day MA will indicate a notable downtrend for the market, which may lead to an impulsive decline towards the substantial and decisive support zone at $3,000.

Source: TradingView The 4-hour chart

On the 4-hour chart, it is clear that Ethereum experienced increased selling pressure near the crucial $3.5K resistance region, leading to a break below $3.3K.

This has resulted in an impulsive decline to the downside towards the crucial $3,000 support region. However, after an impulsive move in the market, there is often a temporary stage of consolidation price corrective action.

Consequently, the price has entered a corrective phase, retreating towards the broken $3.3 thousand threshold. This development has resulted in the formation of an ascending wedge pattern, which indicates a continuation of the downtrend if it breaks from its lower limit. Therefore, if the price completes a pullback and breaks below the lower boundary of the wedge, a bearish continuation is expected, aiming to reach the crucial support range of $2.8 thousand.

Source: TradingView

By Shayan

Although the price of Ethereum has been in a downward trend after failing to break the $3.5 thousand level and rising towards its all-time high, it is beneficial to gauge the sentiment of the futures market.

The attached chart presents Ethereum’s funding rate metric, which measures whether buyers or sellers are executing their orders more aggressively. Positive funding rates indicate bullish sentiment, while negative funding rates show bearish sentiment.

As the chart shows, funding rates have been gradually increasing since the initial price rejection from the $3.5K level. The current values ​​of funding rates indicate that the futures market is no longer overheated and that the price could finally start another sustainable rise if demand returns to the market.

In summary, the funding rate metric suggests that market sentiment has been shifting towards a more balanced state. This change, combined with potential renewed demand, could pave the way for Ethereum to begin a new upward trajectory, aiming to break past resistance levels and possibly set the stage for a rally to its all-time high .

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