Technical Analysis
The Daily Chart
On the daily timeframe, Ethereum’s price has been falling aggressively after breaking below the 200-day moving average, which is around the $3,200 mark. Key levels such as $3,000 and $2,700 have been breached, and the price has tested the $2,200 support zone.
Yesterday’s price action was notably bullish, leading to speculation about a potential V-shaped recovery. Currently, the $2,700 resistance level is holding the price down, which may lead to short-term consolidation before any significant movement occurs.
The 4-Hour Chart
Examining the 4-hour timeframe, the price has rebounded from the $2,200 region and is now testing the $2,700 resistance level. The RSI has also recovered above the 50% threshold, indicating bullish momentum.
On-Chain Analysis
Ethereum Exchange Reserve
With Ethereum’s price experiencing a significant drop, many investors have capitulated and sold their holdings at a loss. However, a period of accumulation might be starting, as some investors view ETH as oversold.
The Bitcoin exchange reserve metric, which measures the amount of BTC held in exchange wallets, shows that increasing values indicate more coins being deposited for sale, while decreasing values suggest an accumulation phase.
The chart reveals a gradual rise in the exchange reserve following the recent drop, indicating investor capitulation. However, with the market showing signs of recovery, the exchange reserve is now falling below its 30-day moving average, suggesting increased demand. If this trend continues, Ethereum could see a recovery soon.
Therefore, if the price breaks through the $2,700 level, a rally towards the $3,000 resistance zone could be expected, potentially leading to a full recovery for Ethereum.
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