The recent steep drop in Ethereum has dashed hopes for a long-term upswing. With a decline below its rising trendline, the cryptocurrency's upward momentum has reversed. With ETH now trading at about $2,400, a dangerously low level for the second-largest cryptocurrency by market capitalization, this breakdown has forced the asset below the crucial $2,500 barrier.
The $2,500 barrier was broken. Falling below this mark indicates that Ethereum might be headed for more losses, as it has historically acted as a crucial support zone. The bearish outlook is further supported by the declining volume that accompanies this decline. Less buying interest is usually indicated by lower trading volume during a price decline, which could make the current downtrend worse.
ETH/USDT Chart by TradingView
Because it indicates that the recent rally that had given investors hope is coming to an end, the break below the ascending trendline is especially concerning. Ethereum may find it difficult to regain its footing in the near future, as this trendline is now functioning as resistance.
Because of the change in market sentiment, there is a growing chance that we will see a longer bearish phase. Traders and investors should prepare for possible further downside as Ethereum remains around $2,400.
Bitcoin's decline
The price of Bitcoin dropped sharply recently, returning to the 200-day Exponential Moving Average. The confidence of traders who were expecting a long-term rally is shaken by this move, which is an indication of an impending price correction and possible trend reversal.
A $200 million market wipeout has caused investors to become concerned about the short-term viability of Bitcoin. A significant decline in market capitalization like this might lead to increased selling pressure and a possible drop in price. Given that the 200 EMA has traditionally been a crucial support level, it is alarming that Bitcoin has been unable to stay above it.
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The fact that Bitcoin has once again fallen short of the coveted $70,000 threshold during this market cycle is even more disheartening for enthusiasts of the cryptocurrency. For traders and investors, this level has been a key psychological target, and failing to reach it implies that the bullish momentum has slowed down. It is clear from the recent price action that Bitcoin is currently in a risky situation.
The market may be changing from a bullish to a bearish phase if it returns to the 200 EMA. A longer downtrend may begin if the price breaks below this level, potentially retesting lower support levels near $55,000 or even $50,000.
Shiba Inu retraces
After a failed attempt at a price reversal, Shiba Inu, the once-dominant meme coin, is now at a critical juncture. The 50-day Exponential Moving Average (EMA), a critical resistance level that when surpassed usually indicates a bullish continuation, has proven difficult for the cryptocurrency to break above.
Concerns regarding the asset's near-term future are raised by SHIB's inability to cross this threshold, which suggests a lack of buying support. The market's overall sentiment regarding Shiba Inu is reflected in the failure to break through the 50 EMA, which goes beyond a simple technical setback.
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Given that the asset appears to be losing momentum, investors who were anticipating a robust rebound may now be reevaluating their positions. Since fewer traders are willing to wager on SHIB's recovery, the volume is decreasing, which highlights the lack of confidence even more.
There is an increasing chance that Shiba Inu will experience a significant reversal given the state of the market. Selling pressure from investors looking to reduce their losses could intensify if the asset stays weak below the 50 EMA. This might trigger a downward spiral in which the absence of buying interest quickens SHIB's fall and pulls it further from its most recent highs.
