Ethereum encountered a significant rejection at the $2.8K threshold, followed by a pullback to the wedge’s broken lower boundary.

This price movement reflects a bearish sentiment and suggests a potential continuation of the downward trend, with the next target being the $2.1K support region.

Technical Analysis

By Shayan

The Daily Chart

Ethereum had been struggling near the lower boundary of a multi-month wedge at $2.8K for several weeks before encountering significant selling pressure, leading to a notable rejection.

As anticipated in our prior analysis, ETH completed a successful pullback to this broken level, followed by a sharp decline. The substantial supply pressure around the $2.8K mark suggests that this rejection could push the price toward the critical $2.1K support region.

Moreover, the 100-day moving average recently crossed below the 200-day moving average at $3.2K, forming a death cross. This bearish signal reinforces the expectation of continued downward movement toward the crucial $2.1K support zone in the short term.

The 4-Hour Chart

On the 4-hour chart, Ethereum could not break through the key resistance region defined by the 0.5 ($2.6K) and 0.618 ($2.8K) Fibonacci levels, leading to heightened selling pressure.

This resulted in a significant rejection at the $2.8K level, initiating a pronounced downtrend. Additionally, ETH broke below the ascending wedge’s lower boundary on the 4-hour timeframe, a pattern that typically signals trend continuations. Consequently, the asset is expected to continue its decline in the short term, with sellers likely targeting the crucial $2.1K support level.

On-Chain Analysis

By Shayan

The futures market has played a significant role in Ethereums recent price movements, with the past few weeks highlighting this influence. Analyzing futures market sentiment offers valuable insights into potential price trends.

This chart showcases the Ethereum Funding Rates metric, which gauges whether buyers or sellers are more aggressive in placing orders. Positive values reflect a bullish sentiment, while negative ones indicate a bearish outlook.

As observed, funding rates have been trending downward in recent months, hitting their lowest levels. This consistent decline suggests a prevailing bearish sentiment in the market, with a noticeable lack of buying interest. Demand in the perpetual markets must increase for Ethereum to recover and approach its all-time highs. If the current trend continues, further price declines are likely in the mid-term.

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

LIMITED OFFER 2024 at BYDFi Exchange: Up to $2,888 welcome reward, use this link to register and open a 100 USDT-M position for free!

Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.