ethereum has been in a very tough spot lately. The cryptocurrency crashed and plummeted to the point where eth was trading at around $2550, having lost more than 20% of its value in the past 30 days.
But despite this massive sell-off, the ethereum price forecast still looks bullish. According to Cryptorphic, ethereum’s future could see a rally and critical support levels creating room for maneuver towards a bullish turn.
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There are a couple of critical reasons for this drop, especially in the past few weeks. According to Spot On Chain, a leading blockchain analytics platform, there are four main factors driving this trend.
According to their information, major players such as the ethereum Foundation, Jump Trading, and two major whale accounts have sold a combined total of 197.8 thousand eth worth approximately $599 million. This has undoubtedly been one of the factors that has driven the upward movement.
<blockquote class="twitter-tweet”>
twitter.com/search?q=%24ETH&src=ctag&ref_src=twsrc%5Etfw” rel=”nofollow”>$Ether has painfully plummeted twice in the last month (23.5%).
In this , we highlight 4 key forces that are likely behind the 197.8K sell-off twitter.com/search?q=%24ETH&src=ctag&ref_src=twsrc%5Etfw” rel=”nofollow”>$Ether (US$599 million), which contributed to the recent capital reductions:
• The ethereum Foundation:
– sold 35.4K twitter.com/search?q=%24ETH&src=ctag&ref_src=twsrc%5Etfw” rel=”nofollow”>$Ether
– still has 275K twitter.com/search?q=%24ETH&src=ctag&ref_src=twsrc%5Etfw” rel=”nofollow”>$Ether ($677 million)
• Hop… image.twitter.com/MAce0kIgMs
— Spot On Chain (@spotonchain) twitter.com/spotonchain/status/1828744993227604228?ref_src=twsrc%5Etfw” rel=”nofollow”>August 28, 2024
Whale activity contributes to market decline
The most prominent player in this regard is Jump Trading. This group added a net 88.9 thousand eth worth $276 million to the various centralized exchanges from July 25 to August 6. This was a preemptive move as eth prices suddenly dropped by 20% on August 5.
Adding to the downward pressure, an ICO whale known as “0xe17” has joined the scene. Since July 9, this whale has been aggressively depositing large amounts of eth into exchanges. Some of the moves he made included sending 48.5K eth to the OKX exchange. Of that amount, 38.5K eth was deposited in the month leading up to the first major price drop on August 5.
Another large whale, “0x682,” also faced accusations of contributing to the market crash. He transferred a total sum of 25,000 eth worth $73.9 million to the Kraken exchange on two occasions. In fact, each of the transfers occurred before the observed price drops and accentuated the decline.
Bullish signals amidst the downtrend
Despite the recent downturn, some analysts are still very optimistic about ethereum’s future. Cryptorphic presented a bullish case for ethereum, adding that the leading cryptocurrency has a significant support zone between $2,184 and $2,348. This range has proven to be quite solid, as eth recently reclaimed it after a severe market pullback.
ethereum is currently trading at $2,559, according to Cryptorphic, close to testing the 35-day EMA resistance, a key level for the cryptocurrency.
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eth technical analysis on a 2-day time frame
eth is holding decent support within the $2,184-$2,348 range. A few weeks ago, when the market experienced a major correction, eth fell to this same support range and recovered.
With the current price at $2,520, eth is likely to… image.twitter.com/43Is9sOtYB
— Cryptorphic (@Cryptorphic1) twitter.com/Cryptorphic1/status/1828805482766598386?ref_src=twsrc%5Etfw” rel=”nofollow”>August 28, 2024
If eth manages to close above this key level, it could signal further progress towards testing a higher resistance level at $3,750. This projection provides some hope to traders who believe in ethereum’s long-term potential.
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ethereum: RSI points to a possible reversal
However, technical indicators offer reasons to cheer. The RSI, one of the leading momentum indicators, is retreating from the oversold level, which could indicate that the bears are losing steam and that the bulls are likely to gain strength.
That shift in momentum could set the stage for a faster move higher in price, especially if ethereum can break above key resistance levels.
The focus will now shift to the key support between $2,184 and $2,348, an area that has been instrumental in preventing further declines so far. Should the bulls prevail, key areas of interest would lie at $2,930, with secondary targets at $3,750. ethereum is clearly on the threshold, which poses a strong recovery or further consolidation.
Featured image from Forbes, chart from TradingView
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