Ethereum is on. While Ethereum is a declining market trend, the top smart contract platform was subject to one of its most severe beatings. It had reached $3,000 last week, but it quickly lost its grounding and began to slide again. Ethereum was unable to establish significant support so its slide continued.
The digital asset has fallen below important support levels due to the decline. These are the simple moving averages for 20- and 50 day that help establish support and then a bottom for any cryptocurrency. This has put significant selling pressure on Ethereum investors and continues to cause sell-offs.
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It is important to point out that Ethereum has not received any support in the short term. An asset that drops below its 50 day moving average indicates a reluctance from investors to invest in it. The market supply of Ethereum continues to exceed demand.
This leaves Ethereum on a risky path to the next bear market. Ethereum is vulnerable to bear control, and if it fails to provide any support, it will fall further.
Ethereum Could Revisit $2500
Investors who have long held digital assets are concerned about the $2,500 price point. The cryptocurrency would be officially at half its historical high, which could mark a return to a bear market. Ethereum is currently holding off the bears, ensuring its position above that price point. However, with momentum dropping so rapidly, it’s more probable that ETH will hit $2,500 before seeing any notable recovery.
The price of ETH in trading is $2,631| Source: ETHUSD on TradingView.com
As we have already noted, ETH fell below the 50 day moving average. It is crucial that the asset trades above this level in order to see any bull rallies or recovery. Failure to do so means that ETH will not be able to provide any significant support.
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Due to the absence of support, $2,522 (the next level of support) will not be able fight and the position is vulnerable. ETH currently trades above $2,600, but a fall below that level will cause it to retest the next support level.
Bears are expected to be successful at the initial test at this level. If that happens then ETH is likely to test $2,400 sooner than investors wish. Investors could also take advantage of this position to buy. In such a scenario, ETH may be preparing for a retest of its $2,600 resistance, which is $2.771.
Featured image by Hodlin. Chart from TradingView.com