ethereum (eth) is experiencing a significant decline, with its price rapidly approaching the crucial support level of $3051. This sharp drop highlights increased selling pressure and growing bearish sentiment in the market.
As ethereum approaches this critical threshold, traders are closely monitoring its behavior for signs of stabilization or a further decline. The support level of $3,051 is now a focal point, determining the short-term direction of ethereum’s price action and potentially setting the stage for further moves in the cryptocurrency market.
This article aims to analyze the sharp decline that the digital asset is experiencing and its impact on the cryptocurrency price as it approaches the support level of $3,051. It also seeks to provide traders and investors with a comprehensive understanding of the current situation, possible scenarios if the support level holds or breaks, and strategies to manage risk in this volatile environment.
eth price is currently trading around $3,181 and is down 5.05%, with a market cap of over $382 billion and a trading volume of over $18 billion at the time of writing. Over the past 24 hours, there has been a 5.25% decrease in eth’s market cap and a 74.43% increase in trading volume.
Technical indicators pointing to a fall in ethereum
A technical analysis of eth’s price action on the 4-hour chart reveals that the crypto-asset is actively bearish and trading below the 100-day simple moving average (SMA). ethereum has been consistently bearish since breaking the $3,360 mark and is currently heading towards the $3,051 support level.
Moreover, an analytical view of the 4-hour Composite Trend Oscillator shows that eth price may continue its downtrend as both the signal line and the SMA of the indicator have dipped below 50% and are attempting to move towards the oversold zone.
On the 1-day chart, the crypto asset has seen a sharp decline below the 100-day simple moving average (SMA) and is attempting to break below the uptrend line while falling towards the $3,051 support level.
Finally, on the 1-day chart, the Composite Trend Oscillator indicates a further bearish move for eth as both the signal and the SMA of the indicator tend to be in the oversold zone.
What if the $3,051 support fails?
Analysis of the possible outcomes if ethereum breaks the $3,051 support level reveals that if the digital asset breaks below this level, it can move lower to test the $2,865 support level and likely move on to test the $2,160 support level and other levels below if the price breaks this level.
However, if ethereum price faces rejection at the support level of $3,051, it will start to rise towards the resistance level of $3,360. If the asset breaks above this level, it can continue to rise to test the resistance level of $3,659 and possibly move on to test other higher levels if it breaks above the $3,659 level.
Featured image from iStock, chart from Tradingview.com
