The Ethereum Price Falls, Testing Long-Term Support Levels
The price of Ethereum (ETH) has experienced a decline after reaching its yearly high in April. This drop has brought the price to a long-term ascending support trendline and a horizontal support area. On the weekly chart, it is evident that the ETH price has fallen since reaching $2,140 in April. Although it appeared to break out from the $1,950 resistance area, this turned out to be a deviation. The price then validated this area as resistance in July, leading to a sharp decline.
Ethereum Finds Support at 500-Day Trendline
Following the fall, the Ethereum price reached a low of $1,546 this week. However, it quickly bounced back and found support at a nearly 500-day ascending trendline and the $1,560 horizontal support area. These structures have played a crucial role in supporting the upward movement for an extended period of time.
Concerns about Centralization and Selling by Ethereum Foundation
News surrounding the Ethereum network has been mostly negative lately. There are concerns that the blockchain has become more centralized after the merge and Shanghai upgrade. In response to these worries, Vitalik Buterin proposed a two-tier staking system that would address centralization concerns and enhance security. This system would involve Node Operators and Delegators working together. Additionally, there have been concerns about underwhelming volume in Ethereum Exchange-Traded Funds (ETFs) and reports of selling by the Ethereum Foundation.
Analysts’ Views on Ethereum Price
The opinions of top analysts regarding the Ethereum price are varied. @CryptoTony_ is bearish and does not consider the ascending support trendline significant. He predicts that the price will initially bounce but eventually fall within a descending parallel channel. On the other hand, @TheCryptoCactus believes in the validity of the trendline and anticipates a sharp drop to $1,100-$1,200 if the long-term support area is lost. @IncomeSharks is bullish and expects a bounce towards the $1,900 resistance area.
ETH Price Prediction: Breakout or Breakdown?
A closer look at the weekly chart suggests a bearish trend, indicating that a breakdown is more likely than a breakout. The Relative Strength Index (RSI) serves as a momentum indicator and currently suggests a bearish trend. If the ETH price breaks down from the support line, it could fall by approximately 20% to the $1,300 horizontal support area. However, if there is a bullish weekly close, the support line will be held, potentially leading to a 25% increase and reaching the $1,950 resistance area.
Hot Take: Uncertainty Surrounds Ethereum’s Future
The future of Ethereum remains uncertain as it faces various challenges such as concerns about centralization and selling by the Ethereum Foundation. Additionally, analysts have conflicting views on its price direction. While some predict a bounce, others anticipate a sharp drop. Traders should closely monitor key support and resistance levels to make informed investment decisions.
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