Ethereum Price Insights: Potential for a Further Decline if Key Support Fails
An analysis of Ethereum's recent price movements and potential support levels amid a fluctuating market.
Ethereum has been consolidating after a significant rejection near the $4,500 resistance zone. The price action remains erratic and uncertain, as buyers strive to maintain crucial support levels while market sentiment appears cautious. Although the macro support zones are still in place, the recent decline in bullish momentum is observable in both the price structure and the behavior of the RSI.
Technical Analysis
Daily Chart
The daily structure indicates that ETH has fallen below its ascending parallel channel, having recently lost the momentum that had propelled it above $4,400. After failing to hold the lower trendline and the 100-day moving average, situated around the $4,100 mark, the asset is currently hovering just above the $3,500 support area.
The RSI remains stuck below 50, pointing to a lack of strength. If buyers are unable to defend this zone, a drop towards the 200-day moving average around the $3,200 level, and possibly the $3,000 demand zone, is likely.
ETH Daily Chart
4-Hour Chart
On the four-hour timeframe, ETH has formed a symmetrical triangle just below the key supply zone around $4,200. The asset has broken below the triangle and is testing its lower boundary again. Typically, breakouts from this pattern lead to volatility spikes, particularly if the price is rejected from the lower trendline of the channel.
A rebound above $4,000 could accelerate the price towards the $4,600 resistance, while a breakdown would activate the $3,500 level. Additionally, the RSI is recovering slightly but has not indicated a robust breakout yet, keeping the short-term outlook neutral.
ETH 4H Chart
On-Chain Analysis
Exchange Netflow
The netflow data for Ethereum presents a cautious scenario. Most days in recent weeks have reflected significant outflows from exchanges, suggesting that holders prefer to keep ETH in private wallets rather than preparing to sell.
However, this hasn’t resulted in strong price continuation, indicating that accumulation might be occurring during the consolidation phase. As long as the outflows persist and panic inflows don’t spike, downside pressure is expected to remain limited.
Ethereum Exchange Netflow
Disclaimer: The information presented is based on the analysis and views of the authors quoted. It does not represent the opinions of CryptoPotato regarding whether to buy, sell, or hold any investments. Investors are encouraged to conduct their own research before making any investment decisions.
