Ethereum had been struggling near the lower boundary of a multi-month wedge at $2.8K for several weeks before encountering significant selling pressure, leading to a notable rejection.
As anticipated in our prior analysis, ETH completed a successful pullback to this broken level, followed by a sharp decline. The substantial supply pressure around the $2.8K mark suggests that this rejection could push the price toward the critical $2.1K support region.
Moreover, the 100-day moving average recently crossed below the 200-day moving average at $3.2K, forming a “death cross.” This bearish signal reinforces the expectation of continued downward movement toward the crucial $2.1K support zone in the short term.
On-Chain Analysis
The futures market has played a significant role in Ethereum’s recent price movements, with the past few weeks highlighting this influence. Analyzing futures market sentiment offers valuable insights into potential price trends.
This chart showcases the Ethereum Funding Rates metric, which gauges whether buyers or sellers are more aggressive in placing orders. Positive values reflect a bullish sentiment, while negative ones indicate a bearish outlook.
As observed, funding rates have been trending downward in recent months, hitting their lowest levels. This consistent decline suggests a prevailing bearish sentiment in the market, with a noticeable lack of buying interest. Demand in the perpetual markets must increase for Ethereum to recover and approach its all-time highs. If the current trend continues, further price declines are likely in the mid-term.
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