The price of Ethereum (ETH) could fall to $1,600
Ethereum (ETH) continues to face increased pressure, with the cryptocurrency's price falling below $2,400 for the second time in just three days
Let's look at whether Ethereum (ETH) has reached the bottom and whether there are risks of continued decline.
Investors are not interested in ETH
At the end of August, the market expected Ethereum to test the psychologically important $3k mark, but it still hasn't happened.
At the moment, the Coinbase Premium Index for ETH has fallen to -0.042. This indicates a noticeable decrease in buying pressure from US investors. Such a decline could be a harbinger of a further fall in the cryptocurrency.
This index tracks the percentage difference in Ethereum spot prices on Binance and Coinbase. High values signal increased interest of US buyers in the cryptocurrency, while low values indicate that investors prefer to refrain from buying or sell.
In addition, spot ETFs based on Ethereum are also experiencing bad times. The fact is that demand for the new financial instrument is now very low.
The inflow of ETH to centralized crypto exchanges (CEX), meanwhile, is increasing. Onchain data from Santiment signals that by the time this material was published, the figure had exceeded 21 million coins. By comparison, just a month ago, there were about 19.94 million ETH on exchanges.
Usually, an increase in the number of offerings on the CEX hints that investors are not looking to sell off assets. However, in the case of Ethereum, the situation is probably different: the selling pressure on the contrary may increase, increasing the pressure on the cryptocurrency's exchange rate.
Earlier we told you that Ethereum's revenues fell by 99% after the Dencun update. Read all the details in the material at the link.
Ethereum forecast: sad prospects
At the time of writing this analysis, ETH is trading at $2,330, having lost almost 3% over the past 24 hours. At the same time, the cryptocurrency has declined by approximately 13% over the past two weeks. Nevertheless, the price is still holding in a range between support at $2,200 and resistance at $2,350.
The Relative Strength Index (RSI) is now below average. This only confirms not the most positive outlook for Ethereum. Under such conditions, a drop to $2,200 looks very likely. If the price goes lower, it risks slipping to $2,048 or even $1,577.
Nevertheless, if the activity of buyers and investors increases, the cryptocurrency will get a chance to recover. In this case, the price of ETH may reach the $2,800 mark again.