ETH Could Plummet To $3K After Losing These Support Levels

ethereum price has failed to break above the key $4,000 level and has been experiencing bearish price action since then.

Investors are now concerned that eth may be reversing its overall price trajectory.

Technical analysis

By Edris Derakhshi (TradingRage)

The daily chart

The daily chart shows that ethereum price has formed a clear double top pattern at the $4,000 resistance level and was rejected twice. The $3,500 level has also been broken to the downside and the market has not been able to recover it after multiple failed attempts.

At the current stage, a drop towards the $3,000 support zone and the 200-day moving average, located around the same level, seems likely. The price reaction to this key level could determine the fate of the market in the medium term.

The 4 hour chart

Looking at the 4-hour time frame, a drop towards the $3,000 level seems less likely as the market is seemingly rallying towards the $3,500 level to test it again.

Since the RSI is also about to surpass the 50% threshold, the market is demonstrating bullish momentum in this time frame. This may indicate that a break above the $3,500 level is more likely this time. Of course, this scenario is valid if the price can reach that level soon.

Chain analysis

By Edris Derakhshi (TradingRage)

ethereum Exchange Reserve

While ethereum price has been falling after being rejected by the $4,000 resistance level, observing on-chain network activity provides an interesting clue about investor behavior.

This chart presents the ethereum exchange reserve metric, which measures the amount of eth held on trading platforms. This value is also used as a supply indicator, since coins held on exchanges can be sold almost at any time.

As shown in the chart, the exchange reserve metric has been gradually increasing over the past few months, indicating that investors are selling their coins, likely to make profits, as the price reaches the $4,000 level. This has been one of the key factors contributing to the current halt of ethereum's bull run.

Meanwhile, during the recent price correction, the foreign exchange reserve metric has been falling and is currently falling below its 100-day moving average. This may indicate possible accumulation by market participants, which could soon lead to a rally for eth.

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