Ethereum (ETH) has experienced a significant drop, declining by over 4% in the last 24 hours. This sharp decrease has erased much of the gains accumulated over the past week, putting the cryptocurrency under substantial selling pressure. If the price fails to stabilize at key levels, further declines could trigger panic sales among some holders.
Analyzing Ethereum’s price trend on a daily chart reveals that it began the week with a notable decline, losing 4.21% by the close of trade on 14th September. This brought the price down to around $2,316. As of now, Ethereum continues its downward momentum, trading at approximately $2,300 with a slight decline of less than 1%.
Potential Support Levels
If Ethereum continues its current trend, it could test the next support level at $2,224, a level where it previously found support after similar declines. Should the downward pressure persist, the next key support is around $2,168, which could be a critical zone to watch. Additionally, Ethereum remains in a bearish trend, as indicated by its Relative Strength Index (RSI), currently hovering around 40. This suggests ETH is edging closer to the oversold zone, signaling a potential weakness in buying momentum.
Increased Selling Pressure
An analysis of Ethereum’s exchange netflow over the past five days shows a consistent pattern of positive netflows. This positive flow started with a significant inflow of over 105,000 ETH on 12th September. The flow indicates that more ETH has been sent to exchanges during this period, which is typically associated with increased selling pressure. The consistent positive netflow signals that traders are moving ETH to exchanges, possibly to liquidate or sell their holdings. This sell pressure is a major factor behind Ethereum’s inability to sustain its recent price rally.
Furthermore, trade volume analysis in the last trading session showed a decline to around $7 billion, reflecting reduced trading activity. The comparison of the volume trend with the price trend suggests that sell volume has been outweighing buy volume. As of this writing, the trade volume has surged to over $14 billion, doubling from the previous session. However, it remains uncertain whether buyers or sellers are driving the increased volume and which side will dominate.
Key Holders and Market Sentiment
According to data from IntoTheBlock, over 1.7 million addresses currently hold Ethereum around the current price level, collectively holding nearly 53 million ETH. This indicates that the current price zone serves as a critical support level. As of now, these holders are at a break-even point, meaning they are neither in profit nor at a loss. If Ethereum’s price drops below this key level, these addresses could panic sell to avoid losses. Given the substantial volume of 53 million ETH, any widespread sell-off could lead to a significant price decline.
However, if ETH can maintain this price range, it might stave off further declines. The behavior of these key holders will be crucial in determining the next price trend for Ethereum. Their actions could either stabilize the market or exacerbate the downward pressure, depending on whether they choose to hold or sell their holdings.
Conclusion
Ethereum’s recent decline has put the cryptocurrency under significant selling pressure, with key support levels being tested. The behavior of large holders and overall market sentiment will play a crucial role in determining the next price trend. If Ethereum can maintain its current price range, it might avoid further declines. However, a drop below critical support levels could trigger panic sales and lead to a more substantial price decline. As always, investors should stay informed and consider the broader market dynamics when making decisions.
