Along with the stock market, Ethereum is experiencing another slump. The digital asset, which had previously struggled to surpass $3,100, was again taken a beating and crashed below $3,000 for the second time. This does not mean that there will be more downtrends. Even though Ethereum has been in a downtrend, there are indicators that indicate it is heading up, even though the trend was not apparent. It would need to test yet another resistance point.
Ethereum crosses $3,000
The price of Ethereum fluctuated in the vicinity $3,000. It’s not a secret. It is not difficult to see why Ethereum has fluctuated around $3,000. The cryptocurrency stands to gain the most from any rally as the sentiment shifts to the positive. It will then test major resistance before it continues its upward trend.
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While sell signals continue to outweigh buys of the digital asset in the market, there are other indicators that show growing bullishness. Ethereum trades above the 20-day average. This signal shows how investors view a digital asset over the long-term. Ethereum trading higher than this level indicates that buyers are more willing to buy it for a greater price than the previous weeks.
The price of Ethereum drops to $2,800| Source: ETHUSD on TradingView.com
For an asset like ETH this might mean that a reversal could be in the making. The next resistance level to be tested is $3,085 after ETH has reached its initial support level at $2,780. Once broken, ETH may be able to ride it through another test at $3,000. This would make it more challenging.
The Profits of ETH Holders
In spite of the current downtrend, Ethereum owners are making more profit. This asset has been one of the most resilient, with strong holders that can withstand the worst. Investors are reaping the benefits. Ethereum has a high profit rate, even though its value is down nearly 40% from its peak.
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72% of Ethereum owners are still in profit, even though their balance is below $3,000. These holders, the majority of which have held their tokens for more than a year, are more bullish, “diamond hands” that are less likely to sell even in a downtrend.
Bullish signals can be found on both exchange and on-chain. It is however below the 50-day moving median, which means that it signals more short-term sell sentiment.
Featured Image from GreekReporter.com. Chart by TradingView.com.