Is Ethereum On The Brink Of Another Crash Below $2.5K?

Ethereum has entered a consolidation correction phase, pulling back towards the broken lower limit of the multi-month wedge.

This move suggests a possible pullback to the previously broken level, indicating a likely continuation of the bearish trend in the coming days.

By Shayan

The daily chart

A closer examination of Ethereum’s daily chart shows that the cryptocurrency has entered a corrective phase, with price action indicating a possible pullback towards the broken lower boundary of the wedge at $2.8k. After finding support near the crucial $2,000 level, ETH initiated a bullish pullback, moving back towards this key resistance zone.

However, this area is likely to be oversupplied, leading to increased selling pressure.

If the cryptocurrency does not break above $2.8 thousand, it will confirm the completion of the pullback, suggesting a continuation of the initial bearish trend. Key levels to watch this week are the $2.8K resistance and the $2K support.

Source: TradingView The 4-hour chart

On the 4-hour chart, Ethereum’s consolidation phase is more pronounced as the price moves back towards the $2.8K resistance. However, the cryptocurrency is currently within a critical range, with Fibonacci levels of 0.5 ($2.6k) and 0.618 ($2.7k) acting as significant resistance.

ETH has also formed an ascending wedge pattern, a known bearish continuation formation, with the potential for a breakout to the downside.

If the price fails to break above this resistance zone and falls below the lower boundary of the wedge, the downtrend is likely to continue towards the $2,000 support level. Tracking Ethereum price action in the coming days is crucial to anticipating its next move.

Source: TradingView

By TradingRage

After a recent bullish reversal in the price of Ethereum, market participants are unsure about the sustainability of this upward movement. To better understand current market dynamics, an analysis of the futures market, specifically the Taker buy/sell ratio, provides valuable information.

This ratio measures the aggressiveness of buyers versus sellers when executing orders. As shown in the chart, after Ethereum faced rejection at the $3,000 level, Taker’s buy/sell ratio cascaded, indicating significant sell order volume in the market. Although the metric saw a recovery during a subsequent bullish corrective move, it was still near zero, suggesting that the bullish move lacked strength. The inability to recapture previous levels implies that the sellers maintain the advantage.

The ratio has recently declined, indicating that sellers are likely preparing to push Ethereum’s price lower. Unless there is an unexpected increase in demand, the current trend points to a possible continuation of bearish pressure in the coming days.

Source: TradingView

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