Are We Witnessing a Bearish Trend for Ethereum This Weekend?
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Ethereum has encountered a challenging time recently, as its price dropped by over 15% below the critical $3,000 range. This decline indicates a bearish trend for the cryptocurrency. The market downturn, triggered by Bitcoin, has played a significant role in Ethereum’s struggle to regain its footing. The influx of additional supply from Bitcoin payouts related to the Mt. Gox bankruptcy has exerted downward pressure on prices across various altcoins, including Ethereum.
A major whale made a substantial move by dumping 26,600 ETH, worth around $82.5 million at the time. This action initially caused a sharp decline of 3% in ETH value. However, the same whale strategically re-entered the market at a lower price point, borrowing significant funds to take advantage of the dip.
The volatility and risk exposure within the crypto market have been evident in the past 24 hours, with $639.27 million in liquidations taking place, out of which $161 million was in ETH alone.
The question now is whether Ethereum’s price will recover to $3,000. The crypto faced a significant rejection at a descending trendline on Monday, leading to a 19% decline over three days. By Thursday, it had dropped below $3,240 and approached its May 1 low of $2,817.
However, there are signs of stabilization as Ethereum attempts to reclaim the $2,900 threshold. At the time of writing, ETH was traded at $2,933 with a market cap of $350 billion. The surge in daily trading volume by over 49% suggests increased investor activity.
If Ethereum fails to close above its May 1 low of $2,815, it could experience a further decline to around $2,650, representing a decrease of 6.5%. Additionally, the relative strength index (RSI) on the daily chart indicates bearish momentum, indicating the potential for continued decline.
On the other hand, a daily candlestick close above $3,500 would indicate bullish strength and may push Ethereum up 6% to revisit its high of $3,750. However, it is more likely that Ethereum will consolidate within the range of $2,900 and $3,300.