As Ethereum grapples with bearish market trends, mirroring the recent Bitcoin dip, investors and market analysts are carefully examining the potential fallouts. The unexpected plunge in ETH value, sinking more than 10% last night, continued an intraday drop of 5.04%. The ongoing volatility in the market has Ethereum struggling to find solid support levels, raising questions about whether this downfall could push the cryptocurrency under $2,000.
A look at the daily chart reveals a falling channel pattern for ETH price. Within this pattern, the value of Ethereum has plummeted over 40% from a swing high of $4,000. At present, ETH is trading at a market value of $2,380, with a lower price rejection from the 24-hour low of $2,319.
While this short-term rejection may suggest a possible rebound within the channel, the broader market sentiment is hinting at a potential breakdown. The emergence of two consecutive bearish candles indicates that the 100 and 200-day EMA lines are on the brink of forming a negative crossover. A trend reversal signal is also coming from the MACD and signal lines.
The current technical indicators are pointing towards a potential falling channel breakdown. If Ethereum is unable to sustain above the lower boundary of the falling channel, we could see an acceleration in the decline due to increased selling pressure.
According to Fibonacci levels, any channel breakdown is likely to find support near $2,224. However, a close below this level would put the $2,000 support zone in jeopardy. The Fibonacci projections suggest a steeper correction could drop Ethereum to $1,740 if the channel breaks down. Conversely, a positive turnaround could test the 78.6% Fibonacci level near the $2,600 mark.
In other related news, US Ethereum spot ETFs recorded a net outflow of $78.09 million on February 24. Among the nine Ethereum ETFs, four maintained a bearish position. BlackRock led the outflow with $48.21 million, followed by Grayscale with $15.45 million. Bitwise and Grayscale mainly held a bearish position, while ARK and 21Shares are yet to update their net flows. The remaining four ETFs maintained a net zero flow, resulting in the overall outflow.
As we continue to monitor the trends, it’s clear that the Ethereum market is in a precarious state. The coming days will be pivotal in determining whether the cryptocurrency can recover from this downturn or whether the bearish trend will continue to dominate.
