Ethereum is currently experiencing a downturn, reflecting the overall performance of the cryptocurrency market. The nearly 2% decline in prices is attributed to the decrease in Bitcoin, Ethereum, and other top altcoins. As of now, the total market capitalization has dropped to $2.17 trillion, with the potential for further losses if bearish pressure continues, potentially undoing the gains made in September.
Ethereum Faces Pressure, Will $2,350 Provide Support?
Recent data from CoinMarketCap indicates that Ethereum has seen a 10% decrease in value over the past week, pushing prices below the $2,400 mark, which was previously a support level and is now acting as resistance. Despite the significant drop in prices, some traders are taking advantage of the current rates to accumulate Ethereum.
On October 3, data from IntoTheBlock revealed that 1.89 million Ethereum addresses purchased 52 million ETH within the price range of $2,311 to $2,383. The fact that a substantial number of buyers chose to acquire Ethereum around $2,350 suggests that this level could serve as a crucial support level that traders should monitor closely.
With the significant amount of ETH accumulated at this level, sellers would face resistance in pushing prices below $2,350, potentially leading to a drop towards $2,100 and the lows seen in August. The $2,350 level aligns with the 61.8% and 78.6% Fibonacci retracement levels based on previous trading patterns.
Future Outlook for ETH
Historically, cryptocurrencies like Ethereum tend to find support within the Fibonacci retracement zone, which includes the $2,100 to $2,350 range. The price action within this zone will likely determine the medium to long-term trend for Ethereum.
A strong rebound from this support level and Fibonacci zone could propel Ethereum to rally above $2,800, with bullish targets set at $3,500. On the contrary, a significant drop below the lows of August and September could trigger panic selling, causing Ethereum to plummet below $2,100 and potentially reach as low as $1,800, signaling losses similar to those in early August.
The current price action indicates a favorable environment for sellers. Recent data shows significant outflows from centralized exchanges, suggesting a preference for selling over buying.
Earlier reports revealed that Wintermute, a prominent market maker, transferred 14,221 ETH to Binance, indicating a potential intention to sell. In August, market makers like Wintermute and Jump Capital sold over 130,000 ETH, contributing to the downward pressure on prices.
Image source: DALLE, chart source: TradingView