Ethereum has spent several weeks consolidating between $2,359 and $2,667, attempting multiple breakouts toward the $3,000 psychological level. Initially, the formation of a bull flag pattern on the daily chart appeared promising for a rally. However, that optimism is fading.
The Awesome Oscillator (AO), once supportive of bullish momentum, now flashes red histogram bars despite remaining in the positive zone—indicating waning upward strength. If Ethereum fails to defend the lower trendline of the flag formation, it could tumble toward $2,206, a critical support level. The current resistance near $2,820 continues to pose a significant barrier, limiting ETH’s upward mobility.
On-Chain Data Supports a Shift Toward Selling Pressure
Glassnode’s on-chain metrics are echoing the technical outlook, particularly Ethereum’s exchange netflow volume. Between May 30 and June 4, ETH experienced substantial outflows—typically a bullish indicator of accumulation. However, on June 6, a sudden reversal occurred with 93,484 ETH, worth around $230 million, flowing into centralized exchanges.
This spike in inflows suggests traders are preparing to offload their holdings, reinforcing a cautious sentiment. If such exchange behavior persists, it could further undermine Ethereum’s ability to sustain its current price level or stage a rally.
Bearish Chart Patterns Point to Further Decline
Ethereum’s 4-hour chart also mirrors bearish sentiment. The Moving Average Convergence Divergence (MACD) has formed a bearish crossover, while the Supertrend indicator’s red line remains above the current price—both signs of downward pressure.
Also Read: Ethereum Price Nears Breakout as Bullish Momentum Builds Toward $3,300 Target
If ETH breaks below the $2,280 support level, the price could plunge below the key $2,000 psychological threshold. However, a short-term recovery is possible if Ethereum manages to retest and overcome resistance at $2,428. In that case, ETH could aim for $2,738 and, under optimal bullish conditions, climb toward the $3,000 mark.
For now, Ethereum appears to be fighting a losing battle, with both technical and on-chain data hinting at a potential downward spiral unless bulls stage a significant comeback.
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
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
