Ethereum’s 3% Price Dip Risks Sinking $800M ETH

Current Market Trends for Ethereum

The current market trends for Ethereum price indicate mixed sentiment with a slight bearish bias. The critical level to watch is $3,065, below which over 258,000 ETH could face losses. Recent volatility has created both optimism and fear among market participants, with the asset recently touching $3,600 before retracing to a significant support zone. On-chain analysis reveals that a drop below $3,065 could put over $800 million worth of ETH underwater.

Market Highlights

• Ethereum exchange reserves increased by 0.44% in the last 24 hours.
• Decreasing prices and open interest signal further potential downside for Ethereum’s price.
• If the price drops below $3,065, over 258,000 ETH (~$800 Million) would be underwater.

Technical Analysis: Ethereum Price Wants to Go Lower

ETH price is currently trending between neutral and bearish, trading within a descending triangle pattern near the lower boundary. It is below the 50-day EMA (green line) and slightly above the 200-day EMA (black line), indicating mixed sentiment with a slight bearish bias.

Recent candlestick patterns display indecision, with small-bodied candles reflecting a lack of clear directional momentum. A significant move could occur if the price breaks out from the descending triangle pattern.

Key support levels for ETH include:

• Around $3,130 (200-day EMA)
• The gray-shaded area around $3,000, which has historically been a significant support zone.

Resistance levels to watch are:

• Around $3,332.12 (50-day EMA)
• The upper boundary of the descending triangle around $3,600.

The Relative Strength Index (RSI) stands at 49.18, indicating a neutral position with no clear overbought or oversold conditions. This neutrality suggests potential movement in either direction, adding to the mixed sentiment. The Chaikin Money Flow (CMF) is at 0.07, showing a slight positive money flow, but not strong enough to suggest significant bullish momentum.

Trading volume remains relatively low, indicating a lack of strong buying or selling interest. A spike in volume would be necessary to confirm any breakout from the current pattern. If the price can bounce from the 200 EMA and break above $3,600, it would signal market strength, potentially invalidating the bearish thesis. The next targets for ETH would be $3,800 and $4,000.

ETH On-Chain Analysis: More Downside Probable

On-chain data reveals further downside risk for Ethereum. According to Coinalyze, Ethereum’s open interest (OI) dropped by 2.66% in the last 24 hours. Open interest measures the total open contracts on an asset and increases with new contracts (whether long or short). Combined with decreasing prices, this suggests ETH may drop further.

Break Even Price (BEP) data from IntoTheBlock indicates that if Ethereum’s price falls below $3,065, over 258,000 ETH (~$800 million) could be in jeopardy. Additionally, CryptoQuant data shows Ethereum exchange reserves have increased by 0.44% in the last 24 hours and 0.76% over the past 7 days, signaling higher selling pressure. CoinGecko reports a 3% drop in 24-hour trading volume for Ethereum, reinforcing the bearish outlook.

To counter this, an increase in Ethereum volume and open interest would be necessary, as it would signify growing market strength and potentially reverse the bearish trend.