Ethereum faces a prolonged bearish trend, testing investor resilience.
Analysts warn of potential heavy correction, with $1,000 as key target.
The crypto market is currently dominated by bears and one of the leading cryptocurrencies, Ethereum, stands as a testimony to it. ETH has been experiencing a steady downward momentum for an extended period. After briefly reaching $2000 following Ripple’s victory over the SEC in mid-July, the price was hovering in the range of $1845 to $1900 till the end of July. During the first two weeks of August, it ranged between $1750 and $1875. In the past week, the price hit a low of $1552 on August 17, marking the lowest price range since Q2 of the year, with values fluctuating between $1650 and $1698.
Looking at the percentile, ETH experienced a decline of 9.66% over the past week and 12.25% over the month. As of now, ETH is priced at $1,662, reflecting a decline of 1.05% in 24H. Despite the current bearish momentum, some investors continue to “HODL,” holding onto their investments. And believing in the longevity of one of the eldest altcoin. This has resulted in a trading volume increase of 24.15% in the past 24h resting at $4 billion.
Additionally, the wounded bulls might find solace if the SEC approves Ethereum ETFs. There is optimism in the market about this prospect, as it could potentially uplift the current bearish market sentiment.
In contrast, analysts predict a potential risk of a significant price correction for Ethereum. If ETH falls below the $1,600 to $1,550 range, conditions might be ripe for a further decline, potentially reaching a hefty correction of 37% to 45%, with a target of $1,000.
Meanwhile, according to the data from Messari, the supply distribution charts indicate that whales, the large holders of Ethereum, have not been offloading their holdings. Instead, they have been increasing their positions. Notably, Ethereum’s co-founder, Vitalik Buterin, recently transferred $1 million worth of ETH to Coinbase, with the reasons for this transfer remaining undisclosed.
How Long Will the Bearish Momentum Persist?
An analysis of Ethereum’s recent price movements reveals a prevailing bearish trend on the daily chart. The short-term 9-day exponential moving average (EMA) is currently situated at $1713, signifying the ongoing bearish sentiment. The Relative Strength Index (RSI) stands at 24, indicating that the asset is oversold.
Ethereum (ETH) Daily Price Chart (Source: TradingView)
If the price continues to decline and drops below $1,626, this would suggest that bears still maintain control. In such a scenario, the ETH/USDT pair might retest the intraday low of $1,550 established on August 17.
Conversely, a price rebound from the current level, pushing it above $1,700. It would signal the beginning of a more robust recovery. The initial target could be the 20-day EMA ($1,777), and surpassing this level might propel the pair toward the 50-day SMA ($1,852).