Is ETH About To Fall Below $2000?

The Ethereum market has experienced a sharp decline of 37% recently, driven by growing fears of an impending economic recession. This drop has sparked widespread fear among investors, leading to increased selling pressure. With this in mind, the critical question now is how far this bearish trend can extend.

By Shayan

The daily chart

A close examination of Ethereum’s daily chart reveals that the cryptocurrency market has come under intense selling pressure due to widespread concerns about a possible economic recession.

ETH has seen a significant 37% drop since Friday, driven primarily by smart money selling activity, likely aimed at managing market exposure and reducing risk. This drop has resulted in Ethereum breaking below several key support levels:

The 100 and 200 day moving averages (MA). The crucial support level of $2.8 thousand. The psychological threshold of 2.5 thousand dollars.

This has triggered a cascade of long liquidations, leaving the market in a state of fear. However, the price has now landed at the critical support region of $2.1K, which was the source of the earlier bullish recovery towards the yearly high of $4K.

Given the intensity of the recent recession, a period of sideways consolidation near the $2.1k support level, followed by small bullish corrections, is likely in the near term. This would allow the market to stabilize and “breathe” before any further significant movement.

Source: TradingView The 4-hour chart

On the 4-hour chart, Ethereum is showing clear signs of substantial selling pressure after breaking below the lower limit of the $2.8K wedge. This breakout likely led to significant long pressure, which amplified the bearish momentum, pushing the price through multiple support levels.

Currently, ETH has reached a decisive support region at the $2.1 thousand mark. After such an impulsive bearish move, the market often enters a corrective phase to consolidate and possibly pull back.

Therefore, a short-term consolidation and correction period is expected, with key targets being the $2.5k level and the Fibonacci retracement zones (probably around the 0.5 and 0.618 levels). However, traders should exercise caution during these volatile conditions and strictly adhere to their risk management strategies to navigate the market effectively.

Source: TradingView

By Shayan

Analysis of Ethereum futures market metrics can provide valuable insights into market sentiment, especially in conjunction with price analysis.

Taker’s bid/ask ratio is a critical metric that reflects whether buyers or sellers are more aggressive in the futures market. A ratio above 1 indicates that buyers are dominant, while a ratio below 1 indicates that sellers are taking the lead.

As shown in the attached chart, Ethereum price has been under significant pressure after failing to break above the $3.5k level. The subsequent rejection of the $3,000 level has led to a sharp increase in sell orders in the market. This increase in selling activity has pushed Taker’s buy/sell ratio to its lowest values ​​since 2021, indicating strong bearish sentiment among futures market participants.

This bearish sentiment suggests that futures traders are anticipating further declines in the price of Ethereum in the near term. The persistent execution of sell orders indicates a lack of confidence in the market’s ability to sustain higher prices, which could lead to continued downward pressure. Therefore, unless there is a significant change in market dynamics or a catalyst that rekindles buying interest, the bearish trend may persist.

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