Ethereum has been on a wild ride lately. The cryptocurrency took a nosedive and crashed to a point where ETH changed hands around $2,550, having lost more than 20% of its value in the last 30 days.
But despite this massive liquidation, Ethereum’s price forecast still looks rosy. According to Cryptorphic, Ethereum’s future could see it rebound, and that critical support levels create a leeway toward a bullish turn.
There are a couple of critical reasons for such a slump, especially in the last weeks. According to a leading blockchain analytics platform, Spot On Chain, there are four major factors pushing this trend.
Based on their information, major players such as the Ethereum Foundation, Jump Trading, and two major whale accounts have sold a combined 197.8K ETH worth approximately $599 million. This has doubtless been one of the move’s factors pushing up.
$ETH has painfully plunged twice in the past month (🔻23.5%).
In this 🧵, we highlight 4 key forces likely behind the sale of 197.8K $ETH ($599M), contributing to recent dumps:
• The Ethereum Foundation:
– sold 35.4K $ETH ($95M)
– still holds 275K $ETH ($677M)• Jump… pic.twitter.com/MAce0kIgMs
— Spot On Chain (@spotonchain) August 28, 2024
Whale Activity Adds To Market Downturn
The most prominent player in that regard is Jump Trading. This group added a net 88.9K ETH worth $276 million to the various Centralized exchanges from July 25th to August 6th. It was a pre-emptive move as ETH prices suddenly took a 20% nosedive on August 5th.
Adding to downward pressure is an ICO whale known as “0xe17.” Since July 9, this whale has been aggressively depositing large amounts of ETH onto exchanges. Some of the moves he made included sending 48.5K ETH to the OKX exchange. Of that, 38.5K ETH was deposited in the month leading up to the first major price drop on August 5.
Another big whale, “0x682, also faced accusations of contributing to the market’s decline. It transferred a sum total of 25K ETH worth $73.9 million to Kraken exchange on two occasions. In fact, each of the transfers was before the observed price drops and furthered the decline.
Bullish Signals Amidst The Bearish Trend
Despite the downturn in recent times, some analysts still remain very optimistic about Ethereum’s future. Cryptorphic presented a bullish case for Ethereum, adding that the leading cryptocurrency has an important area of support between $2,184 and $2,348. This range has indeed proved quite sturdy, as ETH recently reclaimed it after a serious market pullback.
At the moment, Ethereum changes hands at $2,559, according to Cryptorphic, close to testing the 35-day EMA resistance, a key level for the cryptocurrency.
ETH Technical Analysis in a 2-Day Timeframe
ETH is holding decent support within the $2,184-$2,348 range. A few weeks ago, when the market experienced a major correction, ETH dropped to this same support range and bounced back.
With the price currently at $2,520, ETH is likely… pic.twitter.com/43Is9sOtYB
— Cryptorphic (@Cryptorphic1) August 28, 2024
If ETH manages to close above this key level, it would potentially indicate further upside toward testing a higher resistance level at $3,750. This projection gives some hope to traders who believe in Ethereum’s long-term potential.
Ethereum: RSI Points To A Possible Reversal
Technical indicators provide some cause for cheer, though. The RSI, one of the leading momentum indicators, is drawing back from the oversold level, which could suggest that the bears are running out of steam and the bulls are likely to gather strength.
That shift in momentum might set the stage for a quicker move higher in price, especially if Ethereum can break through key levels of resistance.
Attention would now be turned to key support between $2,184-$2,348, an area that has been instrumental in preventing further downside so far. If bulls were to prevail, key areas of interest would come in at $2,930, with secondary targets at $3,750. Ethereum clearly stands at the threshold, posing either a strong recovery or further consolidation.
Featured image from Forbes, chart from TradingView