Ethereum Drops 24%: Will It Rebound or Fall Further?

Price Action and Potential Rebound Scenarios

Ethereum’s price drop has ignited discussions among analysts regarding the likelihood of a rebound or further decline. Key perspectives include:

Anup Dhungana, a prominent cryptocurrency analyst, suggests that Ethereum could face further downside if the current trend continues. Dhungana points to the possibility of a double bottom pattern forming at the $2,200 support level. This pattern, typically viewed as a bullish reversal signal, indicates that Ethereum may find strong support at this price level before potentially rebounding. However, he warns that this can only happen if Ethereum is able to hold onto the $2,200 support; breaking it further could lead to more losses.
The Cryptomist, another popular analyst on X, agrees that there might be a retest of recent lows but suggests there could be opportunities for an upside spike in prices with the incoming monthly candle. This indicates that Ethereum may experience a relief rise, especially as the market approaches the end of the current trading month.
Bluntz, a crypto commentator on X, believes Ethereum is nearing a low point. He notes that the range is about to be reclaimed, with a three-day bullish divergence brewing on the ETH/BTC pair. He also mentions that Finex whales are now selling Bitcoin to purchase Ethereum for the first time in this market cycle, hinting at a potential shift in market sentiment favoring Ethereum.

Beyond technical analysis, Ethereum’s core metrics present a mixed picture:

Recent data from Glassnode highlighted fluctuations in Ethereum’s active addresses. On August 14th, after a consolidation phase, active addresses surged to 589,000—a notable spike suggesting a burst of network engagement. However, this uptick was short-lived. Since then, the number of active addresses has steadily decreased to 435,323, which might hint at waning network activity, potentially applying downward pressure on Ethereum’s price.
Conversely, data from Coinglass reveals a nuanced landscape regarding Ethereum’s Open Interest, which reflects the total number of derivative contracts yet to be settled. Despite a modest 0.01% rise to $10.55 billion, Open Interest stability suggests a pause-mode market. However, Ethereum’s Open Interest volume has plummeted by over 19.20%, now at $29.84 billion, indicating a shrinking appetite for Ethereum derivatives and raising questions about the asset’s future volatility and direction.