ETH could fall to $3000 after losing these support levels

Ethereum price has failed to break above the key $4,000 level and has experienced bearish price action since then.

Investors are now concerned that ETH may reverse its global price trajectory.

Technical Analysis

By Edris Derakhshi (TradingRage)

The daily chart

The daily chart shows that Ethereum price has formed a clear double pattern above the $4,000 resistance level while being rejected twice. The $3,500 level has also been broken to the downside and the market has failed to recover after multiple unsuccessful attempts.

At the current stage, a further drop towards the $3,000 support zone and the 200-day moving average, located around the same level, seems likely. The price reaction to this key level could determine the mid-term fate of the market.

The 4 hour chart

Looking at the 4-hour period, a drop towards the $3,000 level seems less likely as the market seems to be moving up towards the $3,500 level to retest.

With the RSI also poised to rise above the 50% threshold, the market is demonstrating bullish momentum in this timeframe. This may indicate that a break above the $3,500 level is more likely this time around. This scenario is of course valid if the price is able to reach the level soon.

Chain analysis

By Edris Derakhshi (TradingRage)

Ethereum Exchange Reserve

While the price of Ethereum has been falling after being rejected by the $4,000 resistance level, looking at the on-chain network activity provides an interesting clue to investor behavior.

This chart presents Ethereum’s exchange reserve metric, which measures the amount of ETH held on trading platforms. This value is also used as a supply indicator, as coins held on exchanges can be sold at almost any time.

As shown in the chart, the exchange reserve metric has been gradually increasing over the past few months, indicating that investors are selling their coins, likely for profit, as the price approaches the $4,000 level. This has been one of the key factors that have contributed to the current halt in Ethereum’s bull run.

Meanwhile, during the recent price correction, the currency reserve metric has been falling and is currently declining below its 100-day moving average. This may indicate potential accumulation by market participants, which could soon lead to a rally higher for ETH.

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