Recent Ethereum (ETH) Price Downturn Sparks Fears as Price Further Declines Below $2,400

Ethereum is facing mounting pressure as its price continues to slide, triggering concerns across the crypto market. The Ethereum (ETH) price downturn has seen the asset drop below $2,400 twice in just three days, raising fears of further losses. While some traders hope this decline signals a market bottom, on-chain data suggests the sell-off may continue, leaving Ethereum’s near-term outlook uncertain.

Ethereum (ETH) Price Downturn: Significant Investors Are Moving Away from Ethereum Amidst ETFs Dwindle

The trend of Ethereum (ETH) price downturn is further compounded by a significant shift in investor sentiment. On-chain data reveals that the demand for spot Ethereum ETFs has dwindled, indicating waning confidence in the cryptocurrency. According to data from Santiment, the supply of ETH on exchanges has seen a marked increase, rising from 19.94 million ETH a month ago to over 21 million ETH today.

This uptick in exchange supply is a red flag for the market. Typically, a low exchange supply signals bullish conditions, as it suggests that investors are holding onto their assets, anticipating future price gains. However, the current increase in exchange-held ETH indicates that more investors are preparing to sell, which could apply significant downward pressure on the price.

“The growing supply of ETH on exchanges is a concerning trend,” noted Ali Martinez, a crypto analyst. “It suggests that investors are becoming increasingly bearish on Ethereum, and this could lead to further price declines if the selling pressure intensifies.”

On the technical front, Ethereum’s outlook is bleak. Since December 2022, ETH had been forming a series of higher lows on the weekly chart, suggesting a bullish trend. However, the correction in early August shattered this optimism, invalidating any hopes for a near-term price surge.

As of now, Ethereum is trading at $2,345, teetering between a crucial demand zone of $2,200 to $2,350. A fall below this lower boundary could trigger a sharp decline to $2,048. But the potential for a more drastic drop cannot be ruled out. The Relative Strength Index (RSI), a momentum oscillator that measures the speed and change of price movements, is currently below the neutral 50 level. This bearish momentum suggests that Ethereum could face accelerated selling pressure, potentially driving the price down to $2,200.

Crypto trader Michael Van de Poppe commented on the situation: “If Ethereum breaks below $2,200, we’re likely to see a rapid decline to $1,600 or even lower. The RSI is not in Ethereum’s favor right now, and the overall market sentiment is leaning bearish.”

Breaking below the $2,200 level would set a highly bearish tone for Ethereum, with the price potentially plummeting to $1,577—a level not seen since 2021. This scenario is not far-fetched given the current market conditions and the prevailing sentiment among investors.

Ethereum (ETH) Price Downturn: Could There Be a Reversal Following Regulatory Development?

Despite the ominous outlook, not all hope is lost. The **Ethereum (ETH) price downturn** could see a reversal if buying pressure from U.S. investors and the broader market increases. If Ethereum can find support at the $2,200 level, there is potential for a rebound, with the price possibly climbing back toward the $2,800 mark.

Renowned crypto investor Cathie Wood weighed in on the potential for a rebound: “Ethereum’s fundamentals remain strong despite the current price action. If we see a shift in market sentiment or a resurgence in demand, ETH could recover quickly.”

However, this optimistic scenario hinges on several factors, including macroeconomic conditions, regulatory developments, and overall market sentiment. The next few weeks will be crucial in determining whether Ethereum can stave off further declines or if it will succumb to the Ethereum (ETH) price downturn and slide toward $1,600.

The Ethereum (ETH) price downturn has broader implications for the entire cryptocurrency market. As the second-largest cryptocurrency by market capitalization, Ethereum’s performance is often seen as a barometer for the health of the overall market. A significant drop in ETH could trigger a ripple effect, leading to declines in other altcoins and further eroding investor confidence.

Additionally, Ethereum’s struggles could impact the DeFi (Decentralized Finance) space, where ETH is a key asset. A drop in Ethereum’s price could lead to liquidations and margin calls in DeFi protocols, exacerbating the selling pressure.

“Ethereum’s price action is closely watched by the market, and its downturn could have cascading effects on other assets,” explained James Seyffart, an ETF analyst at Bloomberg. “Investors should brace for potential volatility in the broader market if Ethereum continues to decline.”

The Ethereum (ETH) price downturn has put the cryptocurrency at a critical juncture. While a rebound is still possible, the current indicators suggest that the path of least resistance is downward. Investors should prepare for increased volatility as Ethereum tests key support levels, with the potential for a significant drop to $1,600 if bearish momentum continues to build.

For now, all eyes are on Ethereum as it navigates through this turbulent period. Whether it can regain its footing or continue its descent remains to be seen, but one thing is certain: the coming weeks will be pivotal for the future of Ethereum. Get more from The Bit Gazette.