Ether is struggling to maintain its position in the market as major bearish signals are confirmed on the long-term chart.
ETH price plunges below major trend line
ETH’s daily candle closed below the 200-day moving average (200-DMA), a move that has seen corrections several times before.
On the other hand, the spot Ethereum ETF provided a small glimmer of hope to the ecosystem, recording net inflows of $26.7 million on August 1.
Ethereum fees have been plummeting since March.
According to the latest on-chain data, Ethereum generated an average daily fee of over $10 million in Q1 2024. By March 2024, the daily average had reached $15 million. However, since Q2, the annual average fee has fallen to around $3.5 million, with July’s total revenue averaging less than $3 million.
Weekly active users have been relatively stable over the past six months, but Ethereum’s annualized fees have declined 39% month-on-month.
Related: What Would Have to Happen for Ethereum (ETH) Price to Reach $4,000?
This is due to the relative decrease in total locked value, or TVL, of ETH since May, reflecting the decline in DeFi activity. According to data from DefiLlama, over $10 billion in value has been lost since June 7.
Ethereum price support is at $2,700, but will this level hold?
According to data from IntoTheBlock, there are about 3.69 million addresses holding 1.24 million ETH, or about $3,000. This particular price range represents immediate psychological support for Ether.
However, it is relatively weak compared to the important support level of $2,700, where 11.11 million addresses hold a whopping 59.07 million ETH, acquired at an average price of $2,647.
This level was successfully tested as support several times in early July. Crypto trader Poseidon argues that if this range is retested, it may not hold.
“It was actually a bearish retest. It looks terrible on the lower time frames. I don’t see any reason why it shouldn’t go below $2700. Be patient.”
However, a look at the technical analysis of the charts shows that ETH bounced back almost immediately whenever it fell below $3,000 over the past three months, suggesting strong demand in this area.
As you can see on the chart, there is a similar low forming around $2,700. Combined with the input above, another potential bounce is definitely possible at $2,650-$2,700.
Therefore, it would not be a huge surprise if Ether bounced back again quickly from below $3,000. The bid range provides new dynamics and changes to the market structure, but further consolidation at current levels could lead to a reversal of Ether price from previous lows.
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.