Ethereum (ETH) has been caught in a significant downturn over the past month, experiencing a sharp 18.61% drop in value. After reaching a recent high of $3,746 just a week ago, ETH has faced continuous downward pressure, raising concerns about the altcoin’s future trajectory. With the cryptocurrency now trading at $3,196, it has seen a 2.17% decline in the past 24 hours alone, and a 12.67% drop over the past week.
This ongoing decline has captured the attention of traders and investors alike, as it signals a bearish sentiment that’s taking hold of Ethereum’s market. Despite some attempts at recovery, Ethereum continues to face significant challenges in maintaining upward momentum.
The primary factor behind Ethereum’s recent downturn appears to be sustained selling pressure, particularly on major cryptocurrency exchange Binance. According to data from CryptoQuant, Ethereum has faced considerable selling dominance since November 2024. This trend is clearly illustrated by the Taker Buy/Sell Ratio, which has remained negative for months, signaling that the volume of sell orders has consistently outweighed buy orders.
From a technical standpoint, the negative ratio is a clear indicator of a market that is more focused on selling than buying. While there was a brief attempt by buyers to regain control in December, the sellers quickly reasserted their dominance, maintaining the downward pressure on ETH. This has led to a continuation of bearish sentiment, with market participants appearing cautious about potential future price movements.
Several technical indicators suggest that Ethereum is currently in a bearish market, with no clear signs of a reversal. The Chaikin Money Flow (CMF), a popular measure of market momentum, has turned negative. At -0.08, the CMF indicates that sellers are currently in control, further confirming the prevailing downtrend. Additionally, Ethereum’s Relative Strength Index (RSI) has dropped to 38, nearing oversold territory. This suggests that the market is dominated by sellers and that Ethereum could face more downward movement unless significant buying pressure emerges.
Another concerning sign for ETH is the increased inflow of Ethereum into exchanges. Over the past week, the inflow has surged from a negative 50.77k to a positive 103.77k, indicating that more ETH is being moved to exchanges than is being withdrawn. Typically, higher inflow into exchanges precedes increased selling activity, as investors tend to liquidate their holdings when they move assets to exchanges.
In addition to these signs of increased selling pressure, Ethereum’s Estimated Leverage Ratio (ELR) has also been rising. ELR is a measure of leverage in the market, and an increase during a downtrend typically signals growing bearish sentiment. When ELR rises, it suggests that more traders are borrowing funds to take long positions, making them vulnerable to liquidation if prices continue to fall. In the event of further price declines, the liquidation of long positions could lead to a “long squeeze,” amplifying the downward pressure on Ethereum’s price.
With Ethereum facing sustained selling pressure and a bearish market outlook, many analysts are closely watching for potential price targets. If the current downtrend continues, Ethereum could dip as low as $3,030 in the short term. In the worst-case scenario, ETH could fall below the $3,000 mark, finding support around $2,810.
However, it’s not all doom and gloom for Ethereum. If the market begins to shift and a reversal occurs, the altcoin could regain some lost ground. A break above the $3,300 level could signal a potential recovery, allowing ETH to stabilize and potentially recover some of its losses.
Ethereum is currently under significant selling pressure, and its price has been steadily declining for the past month. The prevailing bearish sentiment, combined with negative technical indicators and increased leverage, has put Ethereum in a vulnerable position. While the potential for a further price drop exists, especially if the current trends continue, there is also the possibility of a reversal if the market dynamics shift.
For now, Ethereum remains in a tough spot, and investors should remain cautious. Monitoring key price levels, market sentiment, and technical indicators will be crucial in determining whether Ethereum can stabilize or if it will continue its downward trajectory.
In the coming weeks, Ethereum’s ability to navigate these challenges will be tested. The market remains highly volatile, and as always, cryptocurrency investors should be prepared for rapid shifts in either direction. Whether Ethereum can recover or if it will continue its decline below $3,000 remains to be seen.
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