Is ETH about to fall below $2,000? (Ethereum Price Analysis)

Technical analysis

By largest merchant

Buyers in the ethereum market have recently pushed the price into a strong uptrend, reaching a critical resistance level of $2,000. However, upon encountering a major hurdle around this crucial mark, there is a possibility of a temporary consolidation correction phase in the coming days.

The daily chart

A close examination of the daily chart reveals substantial support around the crucial region, comprising the static support at $1,500 and the lower boundary of the wedge pattern. This support fueled a significant rise, indicating strong buying momentum, with buyers targeting the critical $2,000 resistance zone.

Despite reaching this key level, aligned with the upper boundary of the wedge, ethereum faced rejection, leading to a slight pullback towards the broken 200-day moving average at $1,783.

Considering the importance of the $2,000 resistance and the upper boundary of the associated wedge pattern, a temporary continuation of the ongoing pullback followed by consolidation around the broken moving averages is very likely. If the price completes a pullback towards the broken moving averages, buyers may re-enter the market, once again targeting the substantial $2K level.

The 4 hour chart

On the 4-hour chart, intensified buying pressure around the $1.5k support region pushed ethereum towards the substantial $2k resistance. This upward movement demonstrated significant bullish momentum, reflecting the dominance of buyers in the market.

However, the $2,000 region represents crucial psychological resistance, posing challenges for buyers to push the price higher. Notably, a bearish divergence between the price and the RSI indicator suggested insufficient buying pressure, leading to a reversal and slight corrections.

Furthermore, a recognizable double top pattern around this fundamental resistance confirmed the presence of sellers in the near term.

Given the current market dynamics, there is a high probability that the consolidation correction phase will be prolonged in the short term. This implies that the market could continue its decline before definitively determining its next course of action. In this scenario, the support range between the 0.5 and 61.8 Fibonacci retracement levels ($1,839 – $1,769) is expected to be the next level of interest for the ethereum price.

By largest merchant

The futures market has significantly influenced the price dynamics of ethereum, so it is imperative that the current bullish trend maintains favorable conditions in this market.

The chart illustrates the 30-day moving average of the ethereum Taker bid-sell ratio, a crucial metric for gauging sentiment in the futures market. During a period of substantial price growth in ethereum, the buyers’ bid-sell ratio showed a solid uptrend, indicating strong buying interest. However, a recent reversal in the metric’s trend has led to a bearish trend, falling below the 1 threshold. This reversal indicates that sellers are now executing more aggressive orders altogether, potentially to take profits or take short positions. .

Significantly, this change in the metric aligns with the market’s recent rejection and struggle to rise. The confluence of these events suggests a short-term pullback potential in ethereum price.

If the purchase-sale ratio of buyers resumes an upward trajectory, exceeding the threshold of 1, it would indicate a reactivation of bullish sentiment in the short term, which could support the continuation of the bullish trend. On the contrary, if the metric did not show an upward movement it would raise concerns about the sustainability of any bullish momentum.

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