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With Ethereum facing a surge in supply and growing regulatory troubles, will Ethereum sustain dominance at $2,150 support?
With a 0.95% drop in the past 24 hours, Ethereum is trading at $2,329, a 2.72% dip in the last seven days. The biggest altcoin in the crypto industry, with a market cap of $280 billion, is struggling to regain bullish momentum.
With growing troubles and its co-founder, Vitalik Buterin, on a selling spree, will Ethereum hold crucial support this week?
Ethereum in a Falling Channel
In the daily chart, the Ethereum price action reveals a bull cycle struggling to sustain after four consecutive green candles as it bounces off the support trend line. Trapped in a falling channel pattern, the Ethereum price dips 2.49% from the opening price of $2,388, making an intraday bearish engulfing candle.
After facing rejection at the $2,400 mark, Ethereum has struggled to close above $2,500 for the past nine days. The recent price action, marked by a post-retest reversal of the broken supply zone, suggests the possibility of another dip towards the declining support trend line.
The bearish engulfing candle and failure to achieve a bullish crossover in the MACD indicator signal a potential bearish revival.
In the short term, Ethereum’s price action shows some optimism by breaking through a local resistance trend line and demonstrating lower price rejections near the broken trend line. However, the loss of crucial support at $2,350 undermines bullish momentum, suggesting a potential for further bearish movement.
Vitalik-linked Wallet Sells 190 ETH Amid Growing Troubles For Ethereum
The bearish influence over Ethereum faces a constant surge, with the crypto market facing regulatory pressure against major top exchanges like Coinbase and Binance with the SAB 121. This puts pressure on parties in charge of providing regulated financial crypto custody services.
Retail investor interest is declining, with network usage of decentralized applications dropping by 19% to 96 million. Adding to the bearish outlook is a recent sell-off from a wallet associated with Ethereum co-founder Vitalik Buterin, which saw 190 ETH tokens sold for $441,971.
This wallet initially received 3,800 ETH from Buterin and has offloaded 950 ETH worth $2.28 million since August 30.
Will Ethereum Surpass $2,500?
Based on the technical analysis, the current pullback suggests a possible retest is underway, but the bearish engulfing candle indicates a potential decline ahead.
At this stage, maintaining support at $2,350 is crucial for preserving the chances of an uptrend. If the price falls below this level, it may risk dropping to $2,150. Conversely, a breakout above $2,500 could shift the bullish focus toward the $2,750 supply zone.