Following the approval of the spot Bitcoin Exchange Traded Fund (ETF) in the United States by the Securities and Exchange Commission (SEC), the overall cryptocurrency market has been continuously experiencing bearish momentum. On January 22, 2024, it was observed that the world’s second-largest cryptocurrency, Ethereum, has broken down its strong support level.
What does it mean for investors?
Currently, Ethereum has breached its vital support level and is trading below $2,370. Earlier this morning, when Ethereum was consolidating in a tight range between $2,388 and $2,460, although this level acted as strong support. This support was also identified by IntoTheBlock, an on-chain analytic firm. This data is also identified by a prominent trader and analyst Ali on X (previously Twitter).
Besides this, data also highlights that of the addresses that have bought Ethereum (ETH) between $2,091 and $2,836, nearly 70% of them are in profits, equivalent to nearly 11 million addresses, while 28% of addresses are currently experiencing losses, equivalent to 4.4 million, whereas only 2% of addresses are at breakeven, meaning neither loss nor profit.
Looking at the data, it was also observed that currently, 1 million wallet addresses have bought over 4.8 million Ethereum in the range between $2,388 and $2,460. While only a few investors and traders have bought ETH at a higher level, as observed in the data.
Ethereum’s technical analysis and upcoming views
According to expert technical analysis, the recent breakdown of the strong demand zone and trading below its 200 Exponential Moving Average (EMA) in the 4-hour timeframe currently indicates that in a short timeframe, ETH is bearish. And in the future, we may see over a 9% price decline in Ethereum to $2,150.
Currently, Ethereum is trading near $2,370, and in the last 24 hours, it experienced over a 4.3% downside momentum. If we look at ETH over a more extended period, in the last 7 days, it experienced over a 6% downside momentum.
Following the approval of the spot Bitcoin ETF, Ethereum outperformed Bitcoin as the giant asset manager BlackRock and others have shown their interest in Ethereum for ETF. As a result, ETH experienced a significant price surge.
However, the current situation the cryptocurrency industry is experiencing is because of profit booking. Since June 2023, the overall cryptocurrency market has surged significantly, and now the price decline is a market correction rather than a crash.
