Ethereum continues to face challenges as it struggles to reclaim the $3,500 level, a crucial threshold to reach $4,000. The worsening market conditions have exacerbated the altcoin’s difficulties, reducing the likelihood of a near-term recovery and leaving investors uncertain about the price path.
ETH struggles to reclaim $3,500 as panic selling and LTH liquidations push the activity index to a 2-year high.
Investor selling adds to the volatility, with support at $3,327; failure could take ETH to $3,000, deepening losses.
Converting $3,524 resistance into support could target $3,721, restoring bullish momentum and investor confidence.
Ethereum losses increase:
Recent trading on the Ethereum network has been dominated by losses rather than gains. Many investors are panic selling their holdings, especially in the short term, in an attempt to lock in profits or reinvest during declines. However, these actions often result in missed opportunities, which further exacerbates the decline.
This behavior highlights a broader lack of confidence among investors. The tendency to exit positions prematurely contributes to increased volatility, making it difficult for Ethereum to regain its footing and stabilize above critical support levels.
Ethereum’s activity indicator is at a two-year high, indicating significant activity among long-term holders (LTHs). This metric increases when long-term holders liquidate their holdings, which is typically a bearish sign of price stability.
As activity continues to rise despite the price decline, it suggests that long-term holders are preferring to take profits rather than support the recovery. Such behavior undermines market confidence and puts additional pressure on the Ethereum price, potentially leading to further declines.
ETH Price Prediction: Resistance Break:
Ethereum is currently trading at $3,402, holding above the $3,327 support but failing to break the $3,524 resistance. This consolidation has been going on for almost two weeks, reflecting the uncertainty in the market and the absence of strong bullish signals.
Given the prevailing conditions, Ethereum is likely to continue to consolidate or see a decline. A decline could push the altcoin to test the $3,000 level, extending losses for investors and delaying any significant recovery.
Alternatively, turning $3,524 into support could invalidate the bearish outlook. Achieving this milestone would pave the way for Ethereum to reach $3,721, allowing the cryptocurrency to recover losses and restore confidence among its holders.