Ethereum has been on a wild ride lately. The cryptocurrency has plummeted and fallen to such an extent that ETH has changed hands around $2,550, having lost over 20% of its value in the past 30 days.
But despite this massive sell-off, Ethereum’s price prediction still looks bullish. According to Cryptorphic, Ethereum’s future could see its recovery, and critical support levels will create room for a bullish turnaround.
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There are a few critical reasons for this decline, especially in recent weeks. According to a leading blockchain analytics platform, Spot On Chain, there are four main factors driving this trend.
Based on their information, major players such as the Ethereum Foundation, Jump Trading, and two large whale accounts sold a combined total of 197.8 thousand ETH worth approximately $599 million. This was undoubtedly one of the factors that drove the move.
$ETH fell painfully twice last month (🔻23.5%).
In this 🧵, we highlight 4 main forces that are likely behind the 197.8K selloff $ETH ($599 million), contributing to recent evictions:
• Ethereum Foundation:
– sold 35.4K $ETH (US$ 95 million)
– still holds 275K $ETH (US$ 677 million)• To jump… pic.twitter.com/MAce0kIgMs
– Spot On Chain (@spotonchain) August 28, 2024
Whale activity contributes to market slowdown
The most prominent player in this regard is Jump Trading. This group added a net 88.9 thousand ETH worth $276 million to various centralized exchanges from July 25 to August 6. This was a preemptive move, as ETH prices suddenly plunged by 20% on August 5.
Adding to the downward pressure is an ICO whale known as “0xe17.” Since July 9, this whale has been aggressively depositing large amounts of ETH to exchanges. Some of the actions he has taken include sending 48.5k ETH to the OKX exchange. Of this total, 38.5k ETH was deposited in the month leading up to the first major price drop on August 5.
Another large whale, “0x682,” has also faced accusations of contributing to the market decline. He transferred a total sum of 25,000 ETH worth $73.9 million to the Kraken exchange on two occasions. In fact, each of the transfers occurred before the observed price drops and deepened the decline.
Bullish signs amidst the bearish trend
Despite the recent downturn, some analysts still remain very optimistic about Ethereum’s future. Cryptorphic has presented a bullish case for Ethereum, adding that the leading cryptocurrency has an important support area between $2,184 and $2,348. This range has actually proven to be quite robust, as ETH recently reclaimed it after a serious market pullback.
Ethereum is currently trading at $2,559, according to Cryptorphic, close to testing the 35-day EMA resistance, a key level for the cryptocurrency.
ETH Technical Analysis on a 2-Day Time Frame
ETH is holding decent support in the $2,184 to $2,348 range. A few weeks ago, when the market went through a major correction, ETH dropped to the same support range and bounced back.
Currently priced at $2,520, ETH is likely to… pic.twitter.com/43Is9sOtYB
– Cryptorphic (@Cryptorphic1) August 28, 2024
If ETH manages to close above this key level, it would potentially indicate further upside to test a higher resistance level at $3,750. This projection gives some hope to traders who believe in Ethereum’s long-term potential.
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Ethereum: RSI points to a possible reversal
However, technical indicators provide some cause for joy. The RSI, one of the key momentum indicators, is pulling back from the oversold level, which could suggest that bears are losing momentum and bulls are likely to gain strength.
This shift in momentum could set the stage for a faster upward price movement, especially if Ethereum manages to break through key resistance levels.
Attention would now turn to key support between $2,184 and $2,348, an area that has been instrumental in preventing further declines thus far. Should the bulls prevail, key areas of interest would come in at $2,930, with secondary targets at $3,750. Ethereum is clearly on the cusp of either a strong recovery or further consolidation.
Featured image from Forbes, chart from TradingView