After crossing $4,100, Ethereum suffered downward pressure which caused its price to fall by almost 30%. Let’s look at the future outlook for ETH.
Ethereum (ETH) price situation
Ethereum saw a 70% surge in less than two months, taking its price from $2,400 to $4,100. Unfortunately, this last level acted as resistance, leading to a drop in its price of just under 30%.
The price of ETH reached a new low point around $2,900. Thus, the Ethereum price validated a notable support zone. The latter is all the more relevant because it is located around the first monthly pivot support, the 200-day moving average, as well as at the 61.8% (Fibonacci level) retracement of its last increase.
At the time of writing, Ethereum is trading around $3,200. The cryptocurrency is moving in a significant volume area, which highlights the importance of maintaining its price above this level. Ethereum is currently in a short-term downtrend. However, this decline could act as a simple retracement of the underlying upward trend in the medium and long term.
In terms of ETH's dynamics, it is not surprising that it has been revised downwards, although we can observe a gradual stabilization, hinting at the possibility of a recovery to come.
The current technical analysis was carried out in collaboration with Elyfeinvestor and popularizer in the cryptocurrency market.
Focus on derivatives (ETHUSDT)
The open interest of ETH/USDT perpetual contracts fluctuates in sync with the price of its underlying, reflecting a responsive market where speculator interest follows the direction of price.
On the CVD side, this is revised downwards, indicating a predominance of market sell orders and contributing to notable selling pressure.
Despite this worrying context, the funding rate remains positive, reflecting a persistent bullish conviction among market participants.
Since the decline on January 19, liquidations have remained limited, reflecting a stable market, controlled volatility, rigorous risk management and a balance between buyers and sellers.
The ETH/USDT heatmap shows that Ethereum has bounced precisely off a significant liquidation zone located around $3,000. This area seems to have triggered buying orders, given the reaction observed. Currently, the visible liquidation zones appear much less significant. Above the current price, the key levels are: $3,550, $3,780, and finally $4,125, the latter being the most notable. Below the current price, the main areas identified are below $2,900, around $2,700, and near $2,500. A price approach towards these levels could result in a massive triggering of orders, increasing the risk of volatility for the cryptocurrency, making them major points of interest for investors.
Ethereum (ETH) price forecast
- If Ethereum price maintains above the $2,923 zone, a breakout of $3,500 could be anticipated, opening the way to a target of $3,746 or even $4,100. If this upward movement continues, reaching $4,500, or even Ethereum's last ATH, could be considered, representing an increase of around 53%.
- If Ethereum fails to stay above $2,923, a pullback towards $2,700 or even $2,600 could occur. The next key support, should the decline continue, lies just below $2,400. Lower still, there are several support zones to watch, starting with $2,300, which would correspond to a drop of around 27%.
Conclusion
Ethereum has recently experienced a correction phase after a strong rally, but signs of stabilization are starting to appear. Although the short-term trend remains bearish, confirmation of the support level could pave the way for a recovery, especially if the cryptocurrency market continues to show positive signals. Thus, it will therefore be essential to carefully monitor the price reaction at key levels to validate or adjust current forecasts. Finally, remember that these analyzes are based solely on technical criteria, and that the price of cryptocurrencies can evolve quickly depending on other more fundamental factors.
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