Ethereum price has fallen 13% over the past week, showing a bearish crossover that signals further declines to come. At the same time, foreign exchange reserves have fallen to their lowest level in a decade.
summary
- Ethereum’s price has fallen nearly 46% from its year-to-date high.
- Bearish chart structures, including a descending channel and a multi-year head-and-shoulders pattern, continue to cap the upside.
According to data from crypto.news, Ethereum ($ETH) Prices fell about 46% from this year’s high to about $1,800 on February 6th. This came after the broader crypto market lost more than $1 trillion in value as multiple macroeconomic and geopolitical concerns affected investors’ risk appetite.
It has since recovered some of its losses and has been trading sideways between $2,000 and $2,100 over the past few days, but so far it lacks the strong momentum to regain its year-to-date highs.
Ethereum price continued to trend downward after breaking below multiple major support lines, which caused a liquidation cascade as highly leveraged bullish bets were wiped out.
Additionally, institutional investor appetite through Spot Ethereum ETFs has flattened over the past few months, also dampening hopes for an immediate recovery. These investment vehicles were one of the main factors that helped push Ethereum price to an all-time high last October.
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The weaknesses of major altcoins also stem from the technical settings that are forming on the charts. The daily chart shows that Ethereum price is respecting the boundaries of the descending parallel channel pattern, which has increased in effectiveness since the downtrend that began last October.
Ethereum price forms bearish crossover on daily chart — February 10 | Source: crypto.news
Such a pattern is one of the most bearish formations in technical analysis and usually signals further downside for the token as long as it is confined within the upper resistance line.
In the case of Ethereum, the 20-day SMA is forming a bearish crossover with the 50-day SMA, and the bearish outlook will be heavier in the short term.
On the weekly chart, Ethereum price also confirms a multi-year head-and-shoulders pattern, another bearish formation that has historically portended further declines over a longer period of time.
Therefore, if Ethereum fails to maintain the psychological support level of $2,000, which has become a key battleground in determining the fate of investor sentiment, it could lead to a retrace to $1,800, its lowest point so far this year.
Despite the bearish forecast, on-chain indicators seem to be inconsistent with the tough technical price trend. It should be noted that $ETH Tokens held on exchanges have decreased to approximately 16 million $ETHthe levels were last recorded around mid-2016, according to CryptoQuant data.
Ethereum balances on exchanges have fallen to mid-2016 levels | Source: CryptoQuant
Typically, a reduction in balances held on an exchange tends to support rising prices, but if exchange liquidity continues to decline while large players are defunded, price trends could become increasingly volatile.
As reported by crypto.news, Tom Lee-backed Bitmine has added a whopping $40,000 in funding. $ETH With $83.4 million worth of sales in the past day, we are much closer to our goal of capturing 5% of total circulating supply.
read more: Vitalik Buterin reignites Ethereum and AI debate with subtle AGI nod
Disclosure: This article does not represent investment advice. The content and materials published on this page are for educational purposes only.
