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Bears Win as Ethereum (ETH) Price Fails to Flip This Level Into Support


Ethereum (ETH) price has been following the broader market cues, declining on the chart after hitting a multi-month high last week.

The bigger question now is if ETH holders will be able to hold on to their assets or if they will succumb to the bearish woes.

Ethereum Price to See a Further Decline?

Ethereum price trading at $3,357 has failed in flipping the two-year-old resistance block into a support block. Even though the altcoin was successful in breaching the $3,582 to $3,829 range, it could not sustain above it for too long as ETH had already marked the market top.

Thus, the overall decline wiped out a chunk of the recent profits, with most of the drawdown noted in the last 24 hours when the Ethereum price fell by more than 10%. This resulted in the second-generation cryptocurrency noting $170 million worth of long liquidations.

Ethereum Long Liquidations.
Ethereum Long Liquidations. Source: CoinGlass

This means that over the coming few trading sessions, investors pining for a price rise will likely refrain from making a bullish bet. Consequently, there would be additional room for further bearishness.

However, it is not just the derivatives market that is forced to act bearish at the moment. The same condition is that of another crucial cohort of investors – the long-term holders. These investors define the conviction of the market as when they hold ETH, they tend to do better, whereas, during excessively bearish periods, they move to sell.

Ethereum Liveliness.
Ethereum Liveliness. Source: Glassnode

At the time of writing, Liveline is observing an uptick, which means that long-term holders are moving to liquidate their positions and are losing confidence.

ETH Price Prediction: A Fallback to $3,000 Could Happen

Ethereum price is trading right above the $3,336 support level after falling through the resistance block. Considering the aforementioned developments, the bearishness might push ETH through the $3,336 support and test the $3,031 support line.

ETH/USDT 1-day chart.
ETH/USDT 1-day chart. Source: TradingView

However, this support line also marks the confluence of the 38.2% Fibonacci Retracement of $4,626 to $2,539. This crucial support line could provide Ethereum with the necessary boost to bounce back and prevent excessive drawdown. Thus, the bearish thesis would be invalidated.

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Conclusion

In conclusion, Ethereum (ETH) price has seen a decline after hitting a multi-month high, with the potential for further bearish movement. The failure to sustain above key resistance levels has resulted in a significant drop in price, with long liquidations adding to the downward pressure. There is a likelihood of ETH falling below key support levels, such as $3,336, and testing the $3,031 support line. However, the confluence of the 38.2% Fibonacci Retracement at this level could provide a bounce-back opportunity for Ethereum to prevent excessive drawdown. Overall, the market sentiment remains bearish, with both derivatives traders and long-term holders showing signs of caution.

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