Critical ETH Warning: $2.1K Support Level Approaches Fast

Ethereum has exhibited significant bearish behavior, characterized by a steep drop following a retreat to the lower edge of a previous wedge, along with the emergence of a death cross.

Nonetheless, the price is approaching a vital support level that may prompt a short-term consolidation in sideways movement.

By Shayan

The Daily Chart

Ethereum remains on a strong downward trajectory, causing fear and unease among market players. The low influx of capital into spot ETH ETFs has further highlighted this sentiment, indicating dwindling investor interest and the occurrence of a death cross, where the 100-day moving average dips below the 200-day moving average.

After facing rejection at the lower boundary of the multi-month wedge and the 0.5-0.618 Fibonacci retracement levels, Ethereum has progressed with its decline, affirming the dominance of sellers in the market.

However, the price nears a significant support region, demarcated by the static $2.1K level and the 0.786 Fibonacci retracement at $2,067. This zone is anticipated to possess considerable demand, potentially leading to a brief halt in the downtrend, allowing for sideways consolidation before Ethereum’s next move is clarified.

The 4-Hour Chart

On the 4-hour chart, ETH encountered a solid rejection from the resistance area between the 0.5 ($2.6K) and 0.618 ($2.7K) Fibonacci levels, leading to ongoing bearish momentum toward the $2.1K support. This support level has previously shown resilience, especially in early August, suggesting that it may draw buyers eager to accumulate at these price levels.

Should demand re-emerge at the $2.1K level, Ethereum might undergo a temporary consolidation phase, alleviating the downward pressure. Conversely, if this important support level is broken, it could initiate a long-liquidation event, possibly sending the price down towards the $1.8K region.

The next few days will be critical in assessing whether Ethereum can maintain this support or if a more substantial correction lies ahead.

By Shayan

Ethereum’s value is intrinsically connected to its decentralized network and the active participation of its users. One important indicator of this engagement is the number of unique active addresses on the network, providing a useful measure for Ethereum’s overall market demand and valuation.

The chart illustrates the 14-day moving average of Ethereum Active Addresses, which reflects the total count of distinct active addresses, including both senders and receivers of ETH transactions. This metric has seen a swift decline since late March 2024, emphasizing a decrease in user activity and transaction volumes.

This downward trajectory signals a bearish market outlook, reflecting diminished demand and reduced investor engagement. For Ethereum to rebound and potentially initiate a longer-term sustainable rally, this trend needs to change. A revival in the number of active addresses would indicate an uptick in interest and accumulation of Ethereum, highlighting stronger demand and the potential for a bullish market turnaround.