Is Ethereum on the verge of another drop below $2,500?

ethereum has entered a consolidation correction phase, retreating towards the broken lower boundary of the multi-month wedge.

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

By shayan

The daily chart

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

However, this area is likely to be over-supplied, creating increased selling pressure.

If the cryptocurrency fails to break above $2,800, it will confirm the completion of the pullback, suggesting a continuation of the initial downtrend. Key levels to watch this week are the $2,800 resistance and the $2,000 support.

The 4-hour chart

On the 4-hour chart, ethereum’s consolidation phase is more pronounced as the price retraces towards the $2.8K resistance. However, the cryptocurrency is currently within a critical range, between the 0.5 ($2.6K) and 0.618 ($2.7K) Fibonacci levels, which act as a significant resistance.

eth has also formed a rising wedge pattern, a known bearish continuation formation, with the potential for a downside breakout.

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 $2000 support level. Monitoring ethereum’s price action in the coming days is crucial to anticipate its next move.

By Commercial fury

Following a recent bullish pullback in the ethereum price, market participants are unsure of the sustainability of this upward movement. To better understand the current market dynamics, an analysis of the futures market, specifically the bid/ask ratio of buyers, provides valuable insights.

This ratio measures the aggressiveness of buyers versus sellers in executing orders. As shown in the chart, after ethereum faced rejection at the $3,000 level, the buyers’ bid/ask ratio spiked, indicating a significant volume of sell orders in the market. Although the metric saw a recovery during a subsequent bullish corrective move, it was still hovering around zero, suggesting that the bullish move lacked strength. The inability to reclaim previous levels implies that sellers retain the upper hand.

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

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