A bearish Ethereum fractal collides with a decline in network activity as Ether’s price struggles to break the formidable $2,000 barrier. It’s a battle of wills, a clash of titans, and the outcome remains uncertain.
The price of Ethereum’s native token, Ether (ETH), has seen a respectable 35% increase in 2023. However, its attempts to conquer the psychological resistance level of $2,000 have been met with fierce bearish rejections time and time again. The struggle is real.
Let’s delve deeper into the three likely reasons behind Ethereum’s inability to decisively surpass $2,000 since May 2022.
Firstly, Ethereum’s price trajectory bears an uncanny resemblance to the bearish rejection it faced near $425 in 2018-2019. It’s like history repeating itself, but with a different price tag. In both instances, Ether finds itself in a recovery phase, desperately trying to breach its 0.236 Fib line on the Fibonacci retracement graph. Back then, the line was at $425, and it proved to be a formidable obstacle. Now, in 2023, the same line sits at $2,000, once again acting as a selling area and exerting downward pressure on ETH’s price.
Secondly, the strengthening U.S. dollar has cast a shadow over Ethereum’s prospects. The negative correlation between major cryptocurrencies and the dollar has taken its toll on Ethereum’s demand in recent months. Furthermore, Ethereum has lagged behind Bitcoin due to the ongoing hype surrounding spot Bitcoin ETFs. The ETH/BTC pair has suffered a 20% decline year-to-date, highlighting Ethereum’s struggle to keep up with its more illustrious counterpart.
Lastly, Ethereum’s network activity has taken a hit. The total-value-locked (TVL) across the Ethereum ecosystem has plummeted from 18.41 million ETH to 12.79 million ETH in 2023. This decrease in available funds has resulted in lower yields for investors, as warned by JP Morgan analysts. Additionally, Ethereum’s NFT volumes and unique active wallets have experienced significant drops, signaling a decline in user engagement with popular apps on the Ethereum network.
In terms of technical analysis, Ethereum’s price charts paint a worrisome picture. The potential rebound towards the 50-day exponential moving average (50-day EMA) near $1,665 offers a glimmer of hope. However, the broader pattern suggests a bearish continuation known as an ascending triangle. If the price breaks below the triangle’s lower trendline, we could witness a substantial drop in ETH’s price, potentially reaching $1,465 and $1,560 in October 2023.
On the flip side, a break above the 50-day EMA could propel ETH’s price towards the upper trendline of the triangle, around $1,730 in October 2023. This level coincides with the 200-day EMA, adding further significance to its potential resistance.
– Ethereum’s attempts to break above $2,000 have been met with strong bearish rejections.
– The strengthening U.S. dollar and Bitcoin’s outperformance have dampened demand for Ethereum.
– Ethereum’s network activity has declined, resulting in lower yields for investors.
– Technical analysis suggests a potential rebound towards the 50-day EMA, but a bearish continuation pattern looms large.
– The future of Ethereum’s price remains uncertain, with potential support at $1,465 and $1,560, and resistance at $1,730.
Please note that this article does not provide investment advice or recommendations. Conduct your own research before making any financial decisions.