Ethereum has experienced a rocky start to the week, with signs pointing to a potential 10% drop in the coming hours. As Bitcoin struggles and falls below key support levels, selling pressure on Ethereum is mounting.
Data from Coinglass shows a significant increase in Ethereum liquidations, totaling over $42.7 million, with the majority coming from long positions. Additionally, there has been a rise in the supply of ETH on exchanges, reaching a four-week high of 15.8 million ETH on October 21. This influx of ETH on exchanges suggests that investors are preparing to sell their tokens.
Furthermore, Ethereum’s total value locked (TVL) has been on a downward trend since mid-June, dropping by over 2% in the last 30 days. This decline in TVL highlights Ethereum’s struggles to attract new users compared to other layer-1 protocols like Solana, which has seen a 22% increase in TVL during the same period.
The bearish sentiment in Ethereum’s price chart has pushed the price towards a potential 10% drop. Currently trading at $2,517, ETH faces strong selling pressure after failing to break out above $2,800. The price has dropped below the 200-day Exponential Moving Average (EMA) at $2,552, with support at the 50-day Simple Moving Average (SMA) of $2,487.
If the support at the 50-day SMA fails to hold, ETH could drop to $2,400 and then to $2,330. On the other hand, a bounce off the 50-day SMA could signal strong demand at lower price levels, with potential resistance at $2,850. The Relative Strength Index (RSI) is approaching oversold territory, indicating a possible rebound in the ETH price chart.
In conclusion, Ethereum is facing downward pressure, with on-chain metrics pointing to a potential 10% drop in the near future. Traders should closely monitor key support levels and market indicators to navigate the current volatility in the cryptocurrency market.