Ethereum Drops 10% to $1,803 as Bearish Trends Persist
1min read Ethereum, the second-largest cryptocurrency by market capitalization, has been experiencing a significant price decline, currently trading around $1,803. The recent analysis indicates a breakdown from a symmetrical triangle pattern, suggesting a potential fall to $1,600. This bearish sentiment is further supported by on-chain metrics, which show a reduction in active addresses and declining transaction fees.
Ask Aime: What factors are driving the recent decline in Ethereum's price?
Despite the current bearish trend, some analysts remain optimistic about Ethereum's long-term prospects. They predict that if the $1,800 support level holds, Ethereum could rebound to $4,000 by the end of the year. However, the weakening of Ethereum's dominance and the formation of a descending triangle on the charts indicate further downside risks. The Merge event, which aimed to reduce Ethereum's energy consumption, has also raised concerns about the token's supply, potentially suppressing its price.
Ethereum's price chart paints a bearish picture, with the token struggling to gain momentum above the $1,800 level. The recent dip below a crucial symmetrical triangle pattern suggests further declines towards $1,600. This technical breakdown is supported by on-chain metrics, which show reduced active addresses and declining transaction fees, adding to the bearish sentiment. The price action around the important support zone at $1,766 will be crucial, as Ethereum has often shown strength here. The Relative Strength Index (RSI) readings are not yet in the oversold territory, allowing for further price adjustments.
The overall market structure of Ethereum remains weak, with the formation of lower highs and lower lows indicating that bears are gaining control. This bear phase is further corroborated by momentum indicators. While some analysts predict an end-of-year rebound to $4,000, the current technical outlook favors a downside move. A failure to hold above $1,800 could send the market down to $1,600, while initial resistance would come in at $2,000 in the event of a recovery.
The future of Ethereum remains a hot topic of debate, with short-term volatility being the main hindrance. However, Ethereum's solid ecosystem and extensive use in decentralized finance (DeFi) and blockchain-related innovations place it in a strong position for long-term growth. Investors need to carefully weigh these factors in the evolving cryptocurrency market.
