Ethereum prices continued their strong downward trend on Friday due to rising geopolitical risks and declining demand for cryptocurrencies.
summary
- Ethereum price may continue its downward trend this year.
- Technical analysis shows that it has invalidated the inverse head-and-shoulders pattern.
- Donald Trump’s upcoming attack on Iran could cause prices to fall.
Ethereum ($ETH) token has fallen to $1,937, a sharp decline from its all-time high of $4,943, with key factors suggesting there is room for a drop to the key support level of $1,500.
Ethereum price technical points indicate further downside
The weekly timeframe chart shows: $ETH Prices have remained under pressure over the past few months. It has been declining for the past five weeks and is hovering near its lowest level since May last year.
The coin fell below the key support level at $2,145, invalidating the inverted head-and-shoulders pattern, a common bullish reversal sign in technical analysis.
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Ethereum has fallen below the 50-week weighted moving average and the 200-week weighted moving average. The supertrend indicator is also below, indicating that the bears are still in control.
The relative strength index has moved to the oversold level of 30. Therefore, the most likely scenario is that the RSI continues to fall and the RSI becomes extremely oversold, which then leads to a rebound.
$ETH Price List | Source: crypto news
Institutional demand for Ethereum is declining
Another major bearish factor for Ethereum is that demand from institutional investors has waned over the past few months.
One sign of this is the fact that demand for Spot Ethereum ETFs is declining. The funds shed more than $130 million on Thursday, bringing their monthly outflows to more than $450 million. It has suffered capital outflows for the past four consecutive months.
Another sign of waning demand is that futures open interest has continued to fall over the past few months and now stands at $23 billion, down from a year-to-date high of $41 billion.
Donald Trump is transfixed on attacking Iran
Geopolitics could also contribute to the crash in Ethereum prices, as cryptocurrencies are no longer safe assets.
All indications are that Donald Trump will attack Iran, as the US has amassed a large fleet in the region. In a statement Thursday, he warned Iran that an attack could occur within the next 10 to 15 days.
An attack by Iran would have a major impact on financial assets. For example, it could lead to higher oil prices, leading to higher inflation. This is important because this week’s Federal Reserve meeting minutes indicated that some Fed officials are considering raising interest rates if inflation remains high.
Still, on the positive side, Ethereum has some potential bullish catalysts, including rising transactions, active addresses, and fees. Additionally, key metrics for its ecosystem, such as the total value of DeFi locked, have soared to all-time highs. $ETH Clause. Also, its staking queue continues to grow and its market share in the real-world asset tokenization industry is skyrocketing.
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