Ethereum’s price has been dropping consistently over the past few months since it was rejected from the $4,000 level.

Meanwhile, there is still the possibility for a deeper decline in the coming weeks.

Technical Analysis

By Edris Derakhshi (TradingRage)

The Daily Chart

On the daily chart, the asset has been trending lower since it failed to break above the $4,000 resistance zone. It has since broken below several support levels, including the $3,000 line and the 200-day moving average, located around the $2,900 mark.

Yesterday, the altcoin rebounded from the $2,400 support zone, but it’s still likely to drop back toward it as the RSI is still showing a clear bearish momentum signal. If the $2,400 level is lost, things could get much worse, as a drop toward the $2,000 mark and even lower could be expected.

The 4-Hour Chart

Looking at the 4-hour chart, the price has been consolidating for almost 3 weeks since the massive drop from the $3,500 area.

However, the asset has once again begun to drop lower and could still experience a deeper decline in the coming days. Yet, the $2,400 level is still likely to hold the market and initiate a pullback toward the $2,800 level if it remains intact.

Sentiment Analysis

By Edris Derakhshi (TradingRage)

Long Liquidations (30-day Moving Average)

This chart presents the Ethereum long liquidations, one of the most important metrics that should always be monitored when the price experiences a significant drop. This metric measures the number of long futures positions liquidated each day.

As the graphic shows, during the recent crash, the market experienced a massive long liquidation cascade, the biggest in the past couple of years. If these liquidations continue, more downside could be expected as the closure of these long positions will add to the current selling pressure.

Yet, considering the magnitude of recent liquidations, the futures market is definitely cooling down, and a more sustainable price action would be more likely in the short term.

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Cryptocurrency charts by TradingView.