[Is the price of Ethereum at risk of falling to $1,600?]
The market has been expecting Ethereum’s recent decline to mean a bottom is imminent, but on-chain data suggests this may not be the case.
On August 24, the price of Ethereum briefly rose to 2,800, with market speculation that it may retest the 3,000 mark. However, ETH subsequently continued to trend lower. So far, the Coinbase Premium Index has fallen sharply, suggesting further price declines are likely.
The Coinbase Premium Index evaluates the difference in Ethereum spot prices between Binance and Coinbase. The index value fell to -0.042, indicating that US investors have reduced buying pressure and are inclined to sell.
Meanwhile, Ethereum spot ETF demand is weak, and Santiment’s on-chain data shows that ETH supply on exchanges continues to rise. The increase from 19.94 million a month ago to over 21 million indicates more ETH flowing into exchanges, which could trigger selling pressure.
Typically, lower exchange supply signals a bullish market as investors have no immediate plans to sell. But current conditions for ETH indicate increased selling pressure and the price could fall further.
ETH price formed a series of highs and lows since December 2022, but the correction in August broke that trend. As of now, Ethereum price is sitting at 2,345, which is in the demand zone of 2,200 to 2,350. If it falls below 2,200, it could drop further to 2,048.
Additionally, the RSI index is below neutral levels, indicating that market momentum is biased towards the bearish side. If this trend continues, ETH price could accelerate its decline to 2,200 or even 1,577.
Despite the bearish outlook, ETH is expected to rebound to 2,800 if buying by US investors increases.
