The Potential of Ethereum While Trading at Low Valuations

A drop below $3050 for Ethereum might lead to a bearish market structure, as momentum and selling pressure continue to build, potentially resulting in further losses.

Azcnews (1)

Over the past 24 hours, the cryptocurrency market has witnessed a strong sell-off. Both Bitcoin [BTC] and Ethereum [ETH] recorded declines of around 7% – 8%, with further declines likely. For ETH, the $3.5K level is being considered as a key short-term support level.

A bearish flag pattern is forming

Cryptocurrency analyst Ali Martinez has highlighted that there are signs of a bear flag formation forming. If this prediction comes true, the price could drop to $2.8k. The question is whether the bears can execute this scenario?

In the battle between the bear flag and the bridge zone, who will win? Based on the length of the flagpole, it can be predicted that the price could drop as low as $2.6k. The $2.8K to $2.9K area is where ETH was concentrated in February before surpassing the $3K mark.

ETH 6-hour Chart

Source: ETH/USDT on TradingView

Therefore, this area could act as a support on the way down and give bears pause. The $3.1k level is also a key area with lower trading volume, and has seen a significant reaction compared to the price earlier this month.

Over the past two weeks, trading volume has decreased as Ethereum formed a bearish pattern. The break below the uptrend line confirmed the presence of this pattern. If the price drops below $3,056, the market could continue to decline on the 12-hour chart.

Related: Depleted Ethereum Supply Signals Imminent Price Surge

Ethereum is currently undervalued

Ethereum Santiment

Source: Santiment

Analysis of Ethereum’s on-chain metrics has recorded positive findings for investors. The 30-day MVRV ratio has fallen below zero since March 18, suggesting that the asset is undervalued.

However, the average age of the coins, although trending downward since February 9, is starting to show signs of increasing slightly.

Both of these indicators together create a strong buy signal. However, this is not a short-term signal and risk management needs to be built on technical analysis. At the same time, at the time of this writing, the bears hold the upper hand.

Comparing the network growth in March with January, we see an increasing number of new addresses created on the network.

Total open interest decreased along with the price indicating short-term bearish sentiment. However, there are signs that a drop to $3.1k or $2.6k would still present a buying opportunity for long-term holders.

(1 vote)

5.0/5

(1 vote)
  1. Avatar of Lucien Razafindrafeno
    Lucien Razafindrafeno

    Good

Comments are closed.

Latest

Cardi B Accused Of Fraud After Promoting Controversial $wap Memecoin

News | Editor Choice | Memecoin

Cardi B Accused of Fraud After Promoting Controversial $WAP Memecoin

Rapper Cardi B is facing intense criticism after promoting the controversial memecoin $WAP, amid allegations of fraud and market manipulation in the crypto space.

South Korea Elects Pro Crypto President Lee Jae Myung

News | Editor Choice | Policy & Regulations

South Korea Elects Pro-Crypto President Lee Jae-myung

Lee Jae-myung’s victory in South Korea’s presidential election marks not only a major political shift but also raises new hopes for the cryptocurrency industry, thanks to his strong pro-crypto commitments.

How To Participate In The Trump Wallet Airdrop

Airdrops | Editor Choice

How to Participate in the Trump Wallet Airdrop

Join the Trump Wallet airdrop, a cryptocurrency wallet provided by Magic Eden, which is airdropping 1 million TRUMP tokens to participants.

Donald Trump’s Company Files To Launch Spot Bitcoin Etf

News | Bitcoin | Editor Choice

Donald Trump’s Company Files to Launch Spot Bitcoin ETF

Truth Social, Donald Trump's social media platform, has made headlines by filing to launch a spot Bitcoin ETF, marking a bold move into the digital finance space as the crypto market heats up again.

Team Continues To Deposit $trump Into Exchanges

Memecoin | Editor Choice

Team continues to deposit $TRUMP into exchanges

This morning, a wallet allegedly belonging to the development team of the memecoin $TRUMP deposited 4.17 million $TRUMP tokens, equivalent to $46.97 million USD, onto major exchanges.