Solana & Ethereum Lose 50% of Gains—Cause for Concern?

Is Ethereum (ETH) Price Heading Back to $2000?

Ethereum (ETH) experienced a strong recovery after plunging below the pivotal support level of $2,300. This recovery was initially seen as a bullish indicator, as ETH’s price surged above $2,500, leading to speculation that the price might rise further into the resistance zone above $2,800. However, market sentiment soon flipped, dragging ETH back to its support zone.

Despite the recovery, Ethereum has lost more than half of the recent gains, causing concern among investors about the upcoming price movement. Key technical indicators point to a bearish outlook:

• Death Cross: The 50-day and 200-day moving averages (MAs) underwent a bearish crossover, signaling potential further price declines.
• MACD Indicator: The MACD (Moving Average Convergence Divergence) has been trading in the negative range, undergoing both bullish and bearish crossovers. This indicates uncertain price action.
• Low Trading Volume: Despite the volatility, trading volume has remained relatively low, suggesting a lack of strong market conviction.

Previously, in November 2024, Ethereum’s MACD surged heavily in the positive range when prices maintained higher highs. This recent fluctuation signals that Ethereum is under bearish pressure, and unless the MACD rises above its average, the fear of a pullback to $2,000 remains prevalent.

Solana (SOL) Price Breaks the Crucial Support

Solana (SOL) also saw a dramatic upswing of nearly 30% during the past trading day, bringing the price close to $180. However, the bulls failed to surpass the critical resistance level, which led to a significant pullback. Currently, SOL’s price has broken down from its crucial support level at $160, flashing strong bearish signals for the cryptocurrency.

Throughout February, Solana remained under bearish influence, as the supertrend indicator suggested downward momentum. The recent bullish push briefly tested the supertrend, but the price failed to break it, which would have flipped it into a bullish trend. Furthermore, the Relative Strength Index (RSI) displayed a bearish divergence, indicating that buying pressure is weakening.

With the price breaking the key support, Solana may retest its lows around $140 or even lower, unless strong buying pressure can overcome the prevailing bearish sentiment.

What Does This Mean for Ethereum and Solana?

As of now, both Ethereum and Solana are facing major challenges:

• Ethereum (ETH): Despite its recent recovery, Ethereum’s failure to maintain the $2,500 level and the negative indicators such as the death cross suggest that ETH may drop to the $2,000 level. If this happens, it would mark a low not seen since November 2023.
• Solana (SOL): Solana’s inability to break through the $180 resistance and subsequent breakdown of the crucial support at $160 signals a bearish outlook. There is a real possibility that SOL could test the lower support levels around $140, depending on future market activity.

Both cryptocurrencies are heavily influenced by broader market trends and investor sentiment. While there is still potential for a rebound, the current dominance of bearish pressure means that the upcoming weeks will be critical for both Ethereum and Solana.

Market participants will be closely monitoring these developments to assess whether the bulls can regain control, or if further declines are on the horizon. The next few days will be crucial in determining whether Ethereum can hold the $2,000 support and whether Solana can recover above $160.