ETH Falls Below $3000, But How Low Can It Go?

The price of Ethereum has gone through a frustrating period of consolidation over the past few months after the price failed to break above the $4,000 resistance level.

Technical Analysis

By TradingRage

The daily chart

On the daily chart, the price has recently rallied from $2,800 and has rallied towards the $3,500 resistance level. However, the latter has rejected the downward price.

The market has also fallen below the 200-day moving average, located around $3,200.

At the moment, ETH is trading below the $3,000 support level and could decline further in the near term.

Source: TradingView The 4-hour chart

Looking at the 4-hour chart, the recent rejection of the $3,500 resistance level may be part of a larger bullish scenario.

The reason for this assumption is that the price has corrected almost 70% of its recent rally and is inside the golden zone of the Fibonacci retracement.

Therefore, a bounce from this area could be likely. However, the RSI is still below 50%, indicating that the momentum is in favor of a further bearish move. Therefore, the market is in a tricky situation and investors should be cautious.

Source: TradingView On-Chain Analysis

By TradingRage

Ethereum Exchange Reserve

Analyzing the fundamentals of the Ethereum network would be very beneficial to understand the dynamics of the market. It provides insight into the aggregate behavior of market participants.

This chart shows the Exchange Reserve metric, which measures the amount of ETH held in exchange wallets.

As the chart shows, the metric has been on a steep decline over the past few months. However, it has seen an increase recently, indicating that many investors are depositing their coins on exchanges. This behavior is out of fear and leads to an oversupply, which could cause the price to drop again.

Source: CryptoQuant

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