Ethereum has recently broken through the $1,500 support level, igniting concerns about a further decline. As global market uncertainty continues, the cryptocurrency’s price has dipped significantly, with a 12% drop in the broader altcoin market over the past 24 hours. Ethereum, the second-largest cryptocurrency, is now caught in a bearish trend, and many are wondering if the price could fall toward the key psychological support level of $1,000.

Ethereum’s Recent Struggles

On April 7, Ethereum experienced a sharp decline from around $1,800 to a low of $1,411, and it currently sits just below $1,500. This marks a 5% pullback within a 24-hour period after a 12% drop on Sunday. Ethereum’s current price is following a falling channel pattern, where the asset has faced difficulty in breaking through resistance levels. The price has retested a critical support trendline, which could indicate the possibility of a brief reversal or further decline, depending on how the market reacts.

While the recent low shows some signs of rejection, indicating potential for a bounce, the broader trend remains bearish. The bearish crossover on the Moving Average Convergence Divergence (MACD) further confirms the downtrend, signaling more selling pressure ahead. Traders are cautious, watching for signs of recovery or further breakdown.

Market Sentiment and Derivatives Activity

Despite the prevailing downtrend, Ethereum has witnessed a rise in bullish activity in the derivatives market. The percentage of long positions has risen to 52.6%, which has pushed the long-to-short ratio to 1.10, showing a slight recovery in sentiment. Traders seem to be accumulating positions, betting on a rebound. Notably, a crypto whale opened a significant long position worth $47 million with 20x leverage around $1,416. This whale’s position remains profitable as Ethereum hovers near $1,500, providing some optimism amid the bearish backdrop.

The increase in long positions and the positive funding rate of 0.0012% indicate a more positive sentiment in the derivatives market, as traders seek to capitalize on a potential reversal.

Critical Support and Resistance Levels

Ethereum’s immediate support is found at the S1 pivot point level, which is near $1,424. If Ethereum manages to hold above this level, a potential short-term reversal could occur, as the price may reject further downside. However, if the price fails to hold this support, the next major level to watch is the $1,000 region, which aligns with the S3 pivot point.

Should Ethereum breach this critical level, it could trigger further selling, pushing the asset toward its next key support zone. The $1,000 mark is a psychological level and could be a significant area where buyers may step in to accumulate the asset. A drop to this level would also mark a retracement of Ethereum’s remarkable gains from the Q4 2024 rally, making it a key zone to monitor for potential reversal.

Broader Market Impact

Ethereum’s decline isn’t happening in isolation. The broader cryptocurrency market, as well as traditional financial markets, have been struggling amid rising global uncertainties. The recent turmoil in equity markets, with significant losses in Asia and the U.S., has contributed to a risk-off sentiment that’s spreading to digital assets. Even traditional safe-haven assets like gold have not managed to act as effective hedges during this period of market stress.

Conclusion

Ethereum’s break below the $1,500 mark has raised concerns about further downside potential, particularly toward the $1,000 level. While there are signs of short-term support and some bullish activity in the derivatives market, the overall bearish trend cannot be ignored. Traders should keep an eye on critical support zones, especially the $1,424 and $1,000 levels, as these will play a significant role in determining the direction of Ethereum’s price in the coming days.