Ethereum (ETH) has seen a modest 1% price increase over the past 24 hours, mirroring the broader cryptocurrency market’s bullish trend. The rebound comes after a week-long slump in Ethereum’s price, largely attributed to political tensions in the Middle East.
While the rally offers temporary relief for ETH holders, BeInCrypto’s analysis indicates that it may be short-lived. Weak on-chain demand and a persistent bearish sentiment around the altcoin suggest that the recovery may struggle to maintain momentum.
Ethereum faces low demand
Negative readings of ETH’s daily active addresses (DAA) divergence reflect low demand for the altcoin among market participants. This indicator, which measures an asset’s price movements with changes in its number of daily active addresses, is currently at -70.34%.
For context, DAAs have remained negative despite the price rally since last weekend. Historically, when an asset’s price rises while active addresses decrease, it is considered a sell signal. This suggests that the rally is driven by speculation rather than real demand, implying that the price increase may be short-lived.
Read more: Ethereum ETFs – Understand what they are and how they work
Additionally, Ethereum’s Parabolic Stop and Reverse (SAR) indicator, which helps identify trend direction and potential reversal points, reinforces the bearish outlook. Currently, the indicator’s dots are positioned above the ETH price.
Daily Price Divergence of Ethereum Active Addresses. Source: Santiment
In short, when Parabolic SAR dots appear above an asset’s price, it indicates downward pressure and suggests that the trend is likely to be bearish. Thus, traders often view this as an indicator to hold or consider initiating short positions, expecting further price declines.
Parabolic SAR do Ethereum. Fonte: TradingView
ETH Price Prediction
The Parabolic SAR dots above the price can act as a form of dynamic resistance. Thus, if the price tries to move higher, it may face selling pressure near these dots, reinforcing the downtrend.
Currently, these points are at $2,620, suggesting that ETH will face increased selling pressure once it approaches this level. If the selling pressure intensifies, the price is at risk of falling by 14% to the low of August 5 when Ethereum was priced at $2,116.
Read more: Ethereum (ETH) Price Prediction – 2024/2025/2030
Ethereum Price Analysis. Source: TradingView
However, if there is a resurgence in demand, ETH could break above the resistance formed at the $2,700 price level and target $3,338.
The article Ethereum (ETH) Price Could Drop 15% – Analysis Answers appeared first on BeInCrypto Brazil.
