Ethereum (ETH), the second-largest cryptocurrency by market capitalization, has been under pressure in recent weeks as its price has experienced a significant decline. While some investors may anticipate this to be the market bottom, technical analysis suggests that there could be further downside.
According to data from CoinMarketCap, ETH’s price dropped by more than 4% last week and experienced a near-8% decline in the past 24 hours. As a result, the number of profitable ETH addresses has decreased, with only 63.9% of all ETH addresses currently in the green.
A recent analysis by popular crypto analyst UNKNOWN TRADER identified potential buying opportunities at lower price levels, such as $2,172-$2,085. This suggests that there may be room for further price declines before a potential rebound.
Investor Sentiment and Selling Pressure
Analyzing data from Santiment, Analysts found that the supply of ETH on exchanges is increasing, indicating that investors are selling more. Additionally, the exchange inflow for ETH has spiked, further confirming the presence of selling pressure.
A notable development was highlighted by Lookonchain, where a whale with a strong track record sold 5,088 ETH at a loss of $3.66 million. While this may suggest bearish sentiment, it’s important to consider other factors influencing the market.
Market Bottom and Technical Indicators
Despite the recent price decline, Glassnode’s Pi Cycle Top indicator suggests that ETH is currently trading below its potential market bottom. This could indicate that a bullish reversal may be possible.
However, technical indicators such as the Chaikin Money Flow (CMF) and Relative Strength Index (RSI) are currently showing bearish signals, suggesting that ETH may experience further price declines towards the $2,311 level.
While Ethereum has faced significant selling pressure in recent weeks, there is potential for a rebound based on technical analysis. However, investors should remain cautious as further price declines may occur before a bullish reversal. It’s essential to closely monitor market developments and technical indicators to make informed investment decisions.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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