Ethereum ($ETH ), the second-largest cryptocurrency by market capitalization, has been displaying signs of resilience, despite market-wide volatility. Following Bitcoin’s momentary drop below $59,000, Ethereum (ETH) managed to climb 0.66%, forming an intraday Doji candle. Currently trading at $2414, ETH has shown an intraday pullback of 0.14%, raising questions about whether this recovery could persist amid consistent sales of ETH by Vitalik Buterin and the Ethereum Foundation.
Technical Analysis: Bullish Indicators on the Horizon?
Ethereum’s current price action exhibits a notable rejection near the $2300 support level and its corresponding local support trendline, fueling the possibility of a bullish rebound. Analysts have identified this level as critical for ETH, and the lower price rejection provides hope that the bulls may regain control.
A closer look at the 4-hour chart reveals bullish divergence in the RSI between the past two dips near $2340. This divergence suggests a potential double-bottom reversal, a classic bullish pattern indicating an impending uptrend. In such cases, a reversal rally could push the ETH price toward nearby resistances at $2425, followed by Fibonacci levels of $2520 (50%) and $2624 (78.60%).
However, we highlights a crucial technical support for Ethereum around $2250, a breakdown below the TD support trendline could trigger an average correction of 53%, which could send Ethereum below the $2000 mark.
Bearish Sentiment: Concerns Over Ethereum Sales
The market remains divided on whether ETH can maintain its bullish momentum. One of the biggest concerns stems from sales by Ethereum co-founder Vitalik Buterin and the Ethereum Foundation. Their recent decision to sell significant amounts of ETH has raised alarm bells among investors, as many view insider selling as a bearish signal. Martinez’s analysis, reposted with the caption "Now it makes sense why Vitalik Buterin and Ethereum Foundation have been selling," reinforces the possibility of a sharp drop below $2250.
In addition to insider selling, Ethereum’s 10-day and 100-day moving averages are currently sitting slightly below its current price. This technical weakness, combined with a relatively neutral RSI of 45, suggests that Ethereum lacks the strength to push toward the critical $2900 resistance pivot in the short term.
Potential Price Targets and Scenarios
Ethereum’s price movements suggest a cautiously optimistic outlook, but the path forward is uncertain. If $ ETH breaks through the overhead resistance at $2824, it could aim for a 20% increase to reach $3175. However, falling below the $2120 support could result in a bearish correction down to $1769.
In a bearish scenario, Ethereum may retest the $2300 and $2200 support levels. A further breakdown below $2250 could confirm Martinez’s thesis of a significant correction, potentially leading to a massive selloff and further losses for ETH holders.
Fundamental Analysis: Ethereum’s Role in the Broader Market
While technical indicators show both bullish and bearish possibilities, Ethereum’s fundamental role within the crypto ecosystem remains strong. Ethereum is the backbone of decentralized finance (DeFi) and non-fungible tokens (NFTs), and it continues to lead the way in smart contract innovation. Ethereum’s network upgrades, including its transition to proof-of-stake, have been seen as critical steps toward long-term scalability and sustainability.
Nevertheless, Ethereum (ETH) is not immune to market-wide challenges. Broader macroeconomic factors, such as interest rate hikes and inflation concerns, have weighed heavily on cryptocurrencies. Ethereum’s price is also heavily influenced by Bitcoin’s movements, and BTC’s recent dip under 59K poses additional risks for ETH investors.
Conclusion
Ethereum’s short-term prospects are mixed. On the one hand, the bullish divergence on the RSI, lower price rejection near support, and potential reversal patterns suggest that $ETH could soon break out of its current trading range. On the other hand, insider selling by Vitalik Buterin and the Ethereum Foundation, combined with key moving averages sitting below current prices, implies that caution is warranted.
Whether Ethereum ($ETH ) rebounds to its former highs or faces a significant correction, investors should remain vigilant and adjust their strategies accordingly
