Ethereum (ETH) is facing increasing bearish signals from both technical analysis and on-chain data.
Ethereum (ETH) is showing signs of a potential downturn, having crossed a crucial resistance level of around $2,843. Ethereum is currently trading at $2,622, marking a 4% decline over the past 24 hours, and is facing increasing bearish signals from both technical analysis and on-chain data.
Resistance Level and Technical Indicators
Ethereum is nearing its 50% retracement level of $2,843, calculated from the peak of $3,562 on July 22 and the trough of $2,124 on August 5. This level aligns with key daily resistance at $2,927. If Ethereum is unable to surpass this resistance, it could face a significant drop, potentially falling by 20% to hit the weekly support level of $2,118.
Photo: TradingView
Technical indicators also suggest a bearish trend. The Relative Strength Index (RSI) and the Awesome Oscillator (AO) are currently positioned below their neutral levels, signaling a potential downward movement. In addition, Ethereum’s Exchange Flow Balance, which measures the net flow of ETH into and out of exchanges, has recently experienced a significant increase. The balance surged from -62,018 to 20,707 between Tuesday and Wednesday, reflecting heightened selling activity among investors.
Impact of Recent Market Movements
Recent activities involving Ethereum’s founder and major market players add to the bearish sentiment. Lookonchain data revealed that Vitalik Buterin transferred $534,000 worth of ETH to the Kraken exchange. This move could increase selling pressure and further contribute to a negative outlook for Ethereum in the short term.
vitalik.eth(@VitalikButerin) deposited 200 $ETH($534K) to #Kraken 8 hours ago.https://t.co/wlXvtTTHOF pic.twitter.com/OyfbcvLY3Q
— Lookonchain (@lookonchain) August 15, 2024
Additionally, Jump Trading, a key player in crypto trading, has resumed selling significant amounts of ETH. On Wednesday, Jump Trading offloaded more than 17,000 ETH, valued at approximately $46.44 million. This sale follows a series of ETH sales by Jump Trading since July, during which Ethereum has seen a considerable value drop. For instance, between July 24 and August 5, Ethereum’s value plummeted by over 33%, from $3,400 to $2,200.
The continued sale of ETH by Jump Trading has led to concerns about a potential market dump. Although these sales initially had minimal effect on Ethereum’s price, they have contributed to a recent decline to the $2,620 range. The ongoing investigation of Jump Trading by the Commodity Futures Trading Commission (CFTC) could also impact market sentiment, adding to the uncertainty.
Development Activity and Market Sentiment
Another concerning factor is the decline in Ethereum’s development activity. This metric, which measures project development events on GitHub, has been declining, falling from 265 on Wednesday to 257 on Thursday. This ongoing decrease suggests reduced innovation and engagement with the Ethereum blockchain, which may further influence investor sentiment negatively.
Despite these negative signals, Ethereum might still have a chance to shift its trend. If the price manages to close above the $3,396 level reached on July 29, it could indicate the start of an upward trend and potentially lead to a retest of the July 22 high of $3,562.
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