Ethereum’s Recent Bearish Trends: What’s Driving the Market?
The cryptocurrency market has started the week on a bearish note, with Ethereum (ETH) struggling to maintain its position amidst fluctuating global dynamics. ETH, the second-largest cryptocurrency by market capitalization, has experienced a 0.5% drop in value over the past 24 hours, falling below the $3,180 mark. This decline follows a week of varied on-chain activity, where both institutional whales and retail investors played major roles in influencing prices.
Whales Accumulate, Retail Investors Pull Back
While Ethereum’s on-chain data reveals that whales in the 10K-100K ETH bracket increased their holdings by 190K ETH in the past week, this accumulation trend has slowed due to geopolitical tensions. Particularly, the strained relations between the US and several key European nations seem to have dampened investor sentiment. On the flip side, retail investors holding smaller amounts (1K-10K ETH and 100-1K ETH) reduced their exposure, collectively selling over 510K ETH.
Record-High Network Activity
Despite bearish price movements, Ethereum’s network activity has been surging. Weekly active addresses hit an all-time high of over 706,000, while daily transactions also reached record levels. Notably, these increases in activity have not resulted in higher transaction fees, thanks to network upgrades that have improved efficiency. Lower fees make Ethereum a more attractive option for both investors and users leveraging its blockchain for various decentralized applications.
Technical Analysis: Price Levels and Indicators
On the ETH/USD 4-hour chart, Ethereum has shed nearly 4% of its value over the past two days. The cryptocurrency is holding steady at the $3,060 support level, a crucial threshold that could determine its near-term trajectory. If this level holds, Ethereum could bounce back and test its 200-day exponential moving average (EMA), potentially reaching the $3,360 resistance level in the coming days. However, if the bearish trend persists, ETH could dip below $3,000 for the first time this year.
Technical indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) are currently in bearish territory, with RSI reading 42. A firm movement below the current levels could exacerbate selling pressure.
What’s Next for Ethereum?
Market experts are closely monitoring Ethereum’s ability to maintain its critical support levels amidst geopolitical uncertainties and fluctuating market sentiment. For retail investors, this period of volatility could present both risks and opportunities, depending on individual strategies and risk appetites.
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