Is ETH Doomed To Fall To $2.1K After Recent Rejection?

Ethereum’s recent price movements reveal a strong seller presence, especially around the critical resistance region at the 100-day moving average.

This price action suggests increasing downward pressure, with corrective consolidation expected in the near term.

Technical Analysis

By Shayan

The daily chart

Ethereum recently found more selling activity at the $2.6K resistance area, aligned with the 100-day moving average. This led to a rejection, which pushed the asset towards dynamic support at the channel’s average trendline near $2.3K. The presence of sellers in this resistance zone suggests that it remains a significant barrier for buyers, at least in the medium term.

Currently, ETH is trading within a limited range between the channel’s average support limit and the 100-day moving average. A new uptrend could be underway if the price successfully breaks above the 100-day MA and confirms a pullback.

In this scenario, Ethereum’s targets would be the 200-day MA at $2.9K and the upper limit of the channel near $2.8K. However, if the selling pressure intensifies and ETH breaks below $2.3K, it may review the $2.1K support, which is likely to lead to further pullbacks.

The 4 hour chart

On the 4-hour chart, Ethereum’s recent surge hit significant selling pressure around the resistance zone between Fibonacci levels 0.5 and 0.618 ($2.6K – $2.8K) . This area has served as a strong barrier, indicating a concentration of supply. A switch to an uptrend will depend on price action around this area and a confirmed breakout.

Currently, Ethereum remains near the lower limit of the flag at $2.4 thousand. A break below this support could trigger a liquidation cascade, which could drive the price towards $2.1K. However, the most likely scenario involves a consolidation phase around this support level, with ETH potentially bouncing towards the 0.5 Fibonacci level until a decisive breakout occurs.

Onchain analysis

By Shayan

Ethereum price has been consolidating within a narrow range, indicating market indecision. However, futures market analyzes reveal that a breakout could trigger a substantial liquidation event, likely amplifying the prevailing trend.

According to the chart, liquidity has been concentrated below the $2.4K level, suggesting that this price range may be critical in the short term. Major liquidity pools below $2.4K indicate that a breakout to the downside could attract more sellers and cause long buyers to close out their positions, intensifying bearish momentum.

This scenario raises the possibility of a long squeeze, where a cascade of liquidations could push Ethereum price down to the $2.1k support level. For sellers, the area below $2.4K is an attractive threshold to lower prices. Instead, it represents a crucial line of defense for buyers, whose actions near this level will be critical in determining the broader market trend.

If ETH breaks below $2.4k, it could quickly drop towards $2.1k due to the cascading effect of long liquidations. Alternatively, intense buying pressure at or near $2.4K could help stabilize the price, potentially preventing further declines.

Ultimately, Ethereum price action near the $2.4K threshold will be decisive for the short-term trend, and any move beyond this range could signal a more decisive directional change.

SPECIAL OFFER (Sponsored) Binance Free $600 (Exclusive to CryptoPotato): Use this link to register a new account and receive an exclusive welcome offer of $600 to Binance (full details).

2024 LIMITED OFFER on BYDFi Exchange – Up to $2888 Welcome Reward, Use this link to register and open a 100 USDT-M position for free!

Disclaimer: The information found on CryptoPotato is that of the quoted writers. It does not represent CryptoPotato’s views on whether to buy, sell or hold any investment. You are advised to do your own research before making any investment decisions. Use the information provided at your own risk. See the disclaimer for more information.

TradingView Cryptocurrency Charts.

Leave a Reply

Your email address will not be published. Required fields are marked *