ethereum price has been going through a frustrating consolidation period for the past few months after the price failed to break above the $4,000 resistance level.
Technical analysis
The daily chart
On the daily chart, the price recently rebounded from the $2,800 mark and approached the $3,500 resistance level. However, the latter rejected the price to the downside.
The market also fell below the 200-day moving average, located around the $3,200 mark.
At the moment, eth is trading below the $3,000 support level and it could drop further in the near term.
The 4-hour chart
Looking at the 4-hour chart, the recent rejection from the $3,500 resistance level may be part of a larger bullish scenario.
The reason for this assumption is that the price has corrected almost 70% of its recent rally and is within the golden Fibonacci retracement zone.
Therefore, a bounce from this zone is likely. However, the RSI is still below 50%, indicating that the momentum favors a further bearish move. Therefore, the market is in a tricky situation and investors should be cautious.
- Source: TradingView
On-chain analysis
ethereum Exchange Reserve
Analyzing the fundamentals of the ethereum network would be very beneficial in understanding the market dynamics as it provides insight into the overall behavior of market participants.
This chart shows the exchange reserve metric, which measures the amount of eth held in exchange wallets.
As the chart shows, the metric has seen a sharp decline over the past few months. However, it has recently seen an increase, indicating that many investors are depositing their coins on exchanges. This behavior is driven by fear and creates an oversupply, which could lead to a further drop in price.
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Source: CryptoQuant
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Cryptocurrency Charts by TradingView.
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