Can Ethereum Reach $2.7K After Support at This Key Level?

The price of Ethereum has been on a downward trend in recent months but has located support at an essential level.

At the same time, the market has not yet shown signs of a bullish reversal.

Technical Analysis

By Edris Derakhshi

The Daily Chart

In the daily timeframe, the asset has recently faced rejection at the $2,700 resistance point and has slowly moved down towards the $2,200 support area.

Although this zone has maintained the price so far, the market has not yet shown a notable rebound. With the RSI still under 50%, the momentum is still inclined towards a bearish continuation, making a breakout beneath the $2,200 level likely.

The 4-Hour Chart

Examining the 4-hour chart, it is clear that the market has been experiencing a gradual increase, registering higher highs and lows since bouncing off the $2,200 support level.

However, the bullish momentum remains insufficient, requiring an upward break above the $2,700 level before any long-term bullish reversal can be anticipated. Thus, it is still uncertain if the recent consolidation represents an accumulation or distribution phase.

Sentiment Analysis

By Edris Derakhshi

Ethereum Exchange Reserve

Although Ethereum’s price has already seen a significant correction, market participants remain skeptical about the possibility of a bullish turnaround in the near future. However, examining the market’s supply and demand dynamics can yield valuable insights.

This chart showcases the exchange reserve metric (along with its 30-day moving average), which quantifies the volume of ETH stored in exchange wallets. These coins are viewed as supply since they can be rapidly sold, generating selling pressure.

As indicated by the chart, the Ethereum exchange reserve metric has seen a steady decline over the last few months. Currently, it is rising above its 30-day moving average, signaling a potential uptick in selling pressure that could lead to a further decline in the short term if not countered by adequate demand.