Outside Source
Ethereum’s price has been in a clear downtrend since reaching a local high above $3,600, forming consistent lower highs and lower lows.
The price is now on the verge of solidifying below the key $2,000 support, which could cause even more capitulations in the short term.
Technical Analysis
By Edris Derakhshi (TradingRage)
The Daily Chart
On the daily chart, it is evident that the price has been falling rapidly over the past couple of months with no slowing down. The 200-day moving average, located around the $3,000 mark, was also lost in February. With attempts to reclaim it failing, bearish momentum has been confirmed.
Yet, the RSI is in oversold territory, suggesting a potential short-term relief bounce. Meanwhile, if ETH fails to hold above the $2,000 area, the next strong support lies at the $1,600 area.
The 4-Hour Chart
Looking at the 4-hour timeframe, ETH has been trading within a falling wedge pattern (marked in yellow), which is generally a bullish reversal signal if confirmed with a breakout to the upside.
Recently, the cryptocurrency’s price broke below the key $1,900 support and tested the $1,800 demand zone, where buyers stepped in to prevent further decline. The price is now attempting to reclaim the $1,900 area, signaling potential recovery.
Moreover, the RSI on the 4H timeframe shows a rebound from oversold levels, suggesting that bearish momentum could be fading.
If ETH manages to break back above $1,900, it could see a short-term push toward the $2,100 resistance zone. However, if this recovery fails, another drop toward the $1,600 support level will be highly likely.
Sentiment Analysis
By Edris Derakhshi (TradingRage)
Coinbase Premium Index
The Coinbase Premium Index shows a strong correlation with Ethereum’s price movements, reflecting buying or selling pressure from U.S. investors.
In the current market, the premium has been negative for an extended period, indicating that ETH is trading at a discount on Coinbase compared to Binance. This suggests weaker demand from U.S. institutional and retail investors, which aligns with ETH’s broader bearish trend. Historically, sustained negative premium values have coincided with price declines, as seen in past drawdowns.
For ETH to regain bullish momentum, the Coinbase Premium Index needs to turn positive, signaling renewed U.S. buying pressure.
A shift into green territory would indicate institutional accumulation, often preceding price recoveries. However, with ETH trading around $1,900 and the premium still negative, demand remains weak, increasing the risk of further downside unless sentiment shifts.
This article first appeared at CryptoPotato
