Ethereum Price Analysis: ETH Drops to $3.3K but is More Pain Imminent?
Ethereums price is currently trapped inside a significant tight range, bounded by the 100-day moving average of $3364 and the 200-day moving average of $3212.
A breakout from this range will determine its upcoming trajectory.
Technical Analysis
By Shayan
The Daily Chart
A close examination of Ethereums daily chart reveals that following a rejection near the crucial $3.5K resistance region, the price has plummeted to a substantial support zone.
This critical support includes the 200-day moving average of $3212, serving as a robust defense line for Ethereum buyers. Nevertheless, the price is confined within a crucial tight range bounded by the 100-day moving average of $3364 and the 200-day moving average of $3212. A break above this area will bring sufficient demand into the market, leading to potential upward momentum in the price.
Conversely, a break below the 200-day MA will signal a notable bearish trend for the market, potentially leading to an impulsive decline toward the substantial and decisive $3K support zone.
The 4-Hour Chart
On the 4-hour chart, it is evident that Ethereum experienced heightened selling pressure near the crucial resistance region of $3.5K, leading to a break below $3.3K.
This has resulted in an impulsive bearish descent toward the crucial $3K support region. Nevertheless, following an impulsive move in the market, a temporary stage of consolidation correction price action often occurs.
Accordingly, the price has entered a corrective stage, retracing back toward the broken $3.3K threshold. This development has resulted in the formation of an ascending wedge pattern, indicating a bearish trend continuation if breached from its lower boundary. Hence, if the price completes a pullback and declines below the wedges lower boundary, a bearish continuation is expected, aiming for the crucial $2.8K support range.
Onchain Analysis
By Shayan
While Ethereums price has been trending down after failing to break above the $3.5K level and rally toward its all-time high, it is beneficial to assess the futures market sentiment.
The accompanying chart presents the Ethereum funding rate metric, which measures whether buyers or sellers are more aggressively executing their orders. Positive funding rates indicate bullish sentiment, while negative funding rates show bearish sentiment.
As the chart demonstrates, the funding rates have been gradually increasing since the initial price rejection from the $3.5K level. The current funding rate values indicate that the futures market is no longer overheated, and the price could finally begin another sustainable rally higher if demand returns to the market.
In summary, the funding rate metric suggests that the market sentiment has been shifting towards a more balanced state. This shift, combined with potential renewed demand, could pave the way for Ethereum to embark on a new upward trajectory, aiming to break through previous resistance levels and possibly setting the stage for a rally toward its all-time high.
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