As a seasoned crypto investor with scars from the 2017 bull run and the subsequent bear market, I’ve learned to navigate through these volatile waters with a mix of caution and optimism. The latest downturn in Ethereum has been reminiscent of the wild west, with sellers reigning supreme, but there are signs of hope on the horizon.
Ethereum has shown significant bearish trends recently. This is evident in its steep drop after retracting to the bottom of a fractured triangle pattern, and also due to the emergence of what’s known as a ‘death cross’.
As a researcher, I’ve noticed the price is approaching a significant support point, which might trigger a temporary period of sideways movement in the near term.
Technical Analysis
By Shayan
The Daily Chart
The value of Ethereum has been falling significantly, causing unease and doubt among investors. This uncertainty is also reflected in less money being invested in ETH exchange-traded funds (ETFs). Furthermore, a technical indicator known as the “death cross” has occurred, where the 100-day average line drops below the 200-day average line, which suggests that more investors are losing interest.
After facing rejection at the bottom end of the extended multi-month channel and the key Fibonacci levels of 0.5 and 0.618, it appears that Ethereum has persisted with its downtrend. This downward movement underscores the prevailing power of sellers in the crypto market.
As a researcher examining the Ethereum market, I’ve noticed that the price is nearing a crucial support region. This region is demarcated by the fixed $2.1K level and the 0.786 Fibonacci retracement level at $2,067. This significant support zone is anticipated to trigger a notable demand surge, potentially causing a brief halt in the downward trend. Following this pause, Ethereum might display sideways movement before its next directional shift becomes clear.
The 4-Hour Chart
On the four-hour timeframe, Ethereum encountered strong resistance near the Fibonacci levels of $2.6K and $2.7K, causing a persistent downtrend towards the $2.1K support level. This support zone has been significant in the past, notably in early August, implying it could draw potential buyers seeking to accumulate at these price points.
Should demand return at approximately $2,100, Ethereum might enter a temporary period of stabilization, alleviating the current bearish trend. But if this significant support level gives way, it could initiate a cascade of liquidations, possibly pushing the price down towards the $1,800 area.
As a researcher, over the next few days, I’ll be closely observing Ethereum’s performance to ascertain whether it can sustain this current support level or if we might be heading towards a more significant adjustment in the market.
Onchain Analysis
By Shayan
Ethereum’s value is fundamentally tied to its decentralized network and the active engagement of its users. One key metric to gauge this engagement is the number of unique active addresses on the network, which can serve as a valuable proxy for Ethereum’s overall market demand and valuation.
The given chart illustrates the 14-day running average of Ethereum Active Addresses, which signifies the cumulative count of unique active addresses (both senders and receivers) involved in ETH transactions. Since around late March 2024, we can observe a significant drop in this figure, indicating a decrease in user engagement and transaction volume.
This decreasing pattern suggests a pessimistic outlook on the market, characterized by diminished interest and lower involvement from investors. To regain strength and possibly initiate a prolonged, stable uptrend for Ethereum, this trend needs to reverse. An increase in active addresses would suggest growing curiosity and Ethereum acquisition, implying stronger demand and potentially leading to an optimistic market reversal.
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2024-09-07 19:00