Ethereum Overview
Ethereum has forfeited significant support thresholds ($3,200 and $2,200), declining over 33% in just three weeks to hover around $1,891.
ETH spot ETFs are witnessing cash withdrawals, with about $73 million taken out on Thursday alone.
Despite the challenges in price, Ethereum continues to be a frontrunner in DeFi, showcasing a $45 billion TVL.
Developers are focused on the forthcoming Pectra upgrade, with a testnet rollout anticipated for mid-April 2025.
Currently, ETH encounters resistance in the range of $1,900-1,950 but has discovered support above $1,760.
ETH has faced a sharp downturn in recent weeks, diverging from Bitcoin’s upward momentum as the second-largest digital currency continues to grapple with downward pressures. While Bitcoin advances alongside gold’s ascent, Ethereum is trapped in a steady decline, breaching critical support levels, which raises concerns among investors.
The plunge in price started post Donald Trump’s second inauguration. Ethereum has dropped below two essential support thresholds at $3,200 and $2,200. In the last three weeks, ETH has tumbled over 33%, trading close to $1,891 as recorded on Friday, March 14.
This drop transpires amid wider financial market pressures. Major stock market indices, such as the S&P 500, have been declining due to uncertainties arising from U.S. tariff conflicts. These circumstances have prompted long-term investors to seek refuge in safer assets such as gold and stablecoins.
On-chain analytics from Glassnode indicate increasing apprehension among long-term Ethereum holders. This sentiment is demonstrated by ongoing cash withdrawals from U.S. spot Ether ETFs, which have witnessed outflows for three consecutive weeks. On Thursday alone, net withdrawals reached around $73 million.
From a technical perspective, ETH appears oversold in comparison to Bitcoin. Ethereum has struggled to breach the $4,000 resistance level throughout the past year and now confronts significant support tests. To avert further decline towards $1,500, ETH must maintain its current support level.
The ETH/BTC trading pair is testing a vital support threshold around 0.023. Should this level hold, it may aid in regaining bullish momentum soon. Technical indicators signify a potential recovery if critical levels can be sustained.
Recent trading activity shows ETH developing a base above $1,760 and beginning a recovery phase. The price successfully broke through several resistance levels, including $1,820 and $1,850. Bulls temporarily pushed the price above $1,920, exceeding the 23.6% Fibonacci retracement level of the drop from $2,150 to $1,752.
Nonetheless, selling pressure persists in the vicinity of the $1,950 resistance zone. Ethereum is currently trading below $1,920 and the 100-hourly Simple Moving Average. A short-term bearish trend line has been established with resistance at $1,900 on the hourly chart.
The next crucial resistance stands at around $1,950, aligning with the 50% Fibonacci retracement level. If Ethereum can surpass this, the subsequent targets would be $1,990 and potentially $2,050. Clearing these thresholds could pave the way towards $2,120 or even $2,250.
Conversely, ETH encounters initial support in the vicinity of $1,845. The first major support threshold is located at $1,800, with additional support at $1,750. A breach below these levels could lead the price towards $1,720 or even $1,650 shortly.
Fundamentals Still Robust
Despite the price challenges, Ethereum’s fundamentals remain robust. It continues to lead the decentralized finance (DeFi) arena with approximately $45 billion in total value locked (TVL). The Ethereum ecosystem also bolsters a stablecoin market capitalization exceeding $123 billion.
The competition from other layer-one blockchains like Solana is intensifying. To maintain its competitive advantage, Ethereum developers are diligently working on the approaching Pectra upgrade. Ethereum Foundation core developer Tim Beiko disclosed that the third testnet, Hoodi, is set to launch by mid-April 2025 to finalize preparations for this upgrade.
For Ethereum to reverse its downward trend, it must conquer resistance at $1,900 and $1,950. A definitive move above these levels could catalyze a significant increase and recover market confidence in ETH’s price trajectory.
Be the first to comment