ethereum price has been falling recently, following a second rejection from the $4,000 resistance level, and has yet to recover.
Technical analysis
The daily chart
On the daily chart, the price has been making lower highs and lower lows since it failed to break above the $4,000 level a while back. The market has also fallen below the 200-day moving average, around the $3,100 mark.
Currently, the price is retesting the 200-day moving average but it seems to be getting rejected to the downside. As things stand currently, it seems likely that the cryptocurrency will drop towards the $2700 support level in the near term.
The 4-hour chart
The 4-hour chart shows a zoomed-in view of the recent price action. As is evident, the downtrend has deepened recently and the market briefly dipped below the $3000 support level.
However, following an oversold signal from the RSI, the price has recovered above the mentioned support zone. However, the price apparently lacks the momentum to continue rising and could be on the verge of a deeper drop towards the $2,700 area.
On-chain analysis
ethereum Exchange Reserve
During ethereum’s downtrend over the past few weeks, many analysts have been looking for signs of capitulation that indicate a possible bottom. Some signs are becoming apparent.
This chart shows ethereum's exchange reserve metric, which measures the amount of eth held in exchange wallets. An increase shows potential selling pressure, while a decrease indicates a decrease in supply.
Following the recent brief dip below the $3,000 level, the foreign exchange reserves metric has seen a surge above its 30-day moving average. This could signal the beginning of the capitulation phase as many investors’ stop losses were below the $3,000 level.
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