Is the worst over for ETH after 37% drop?

Following a sharp 37% drop, ethereum found significant buying activity near the $2.1K support region, leading to a bullish rally.

However, the current price action suggests that eth may be completing a pullback towards the lower boundary of the wedge at $2.8K, which could signal a continuation of the downtrend.

By shayan

The daily chart

A closer look at ethereum’s daily chart reveals a strong bullish response near the critical support level of $2,100, resulting in a rapid surge. This move indicates strong demand around $2000, with investors showing interest at lower prices, reflecting their confidence in its long-term potential.

However, eth is now facing a substantial resistance level, which includes the previously broken lower boundary of the wedge and the key $2.8K threshold.

This zone could potentially halt the upward momentum and trigger a reversal, which would mark a valid pullback towards the broken level. If this happens, ethereum’s next target would likely be the decisive psychological support level of $2K.

The 4-hour chart

On the 4-hour chart, the cryptocurrency is showing signs of recovery near the important $2K support level, leading to minor corrective pullbacks.

However, the price has now reached a critical resistance zone, bounded by the 0.5 and 0.618 Fibonacci levels. This zone is expected to face increased selling pressure and is likely to be the primary target of the current corrective move.

Given this resistance, eth seems likely to face rejection from this region, which could continue its downtrend towards the $2,000 support. However, if an unexpected bullish breakout occurs, the price could see a solid surge, aiming to reclaim the lower boundary of the wedge and the crucial $2,800 mark.

By shayan

ethereum has recently seen a significant price drop, leading investors to speculate on whether the downtrend will continue. However, futures market data suggests that a reversal could be on the horizon.

The chart provided highlights ethereum long liquidations, which measure the liquidation of perpetual long positions. In bull markets, a significant liquidation event is typically followed by a price rally as the futures market stabilizes and spot buying pressure takes over.

The recent cascade has triggered massive liquidations of long positions, reaching levels not seen since November 2022. This significant cascade of liquidations likely signals a cooling of the futures market, where many leveraged positions have been eliminated.

With the futures market potentially restarting, if demand returns, ethereum could be primed for another impulsive bullish surge in the long term.

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