Ethereum Price Faces Downward Pressure Amid Death Cross Formation
Ethereum’s price has formed a death cross, signaling potential declines as whales sell off assets. Currently at $2,600, the cryptocurrency has fallen over 35% since December, driven by weak demand and significant net outflows from ETFs. Whale activity further complicates the outlook, indicating negative sentiment toward Ethereum’s future performance.
Ethereum’s price has recently created a death cross pattern, indicating potential further declines as large investors, or whales, offload their holdings. Currently trading at approximately $2,600, Ethereum has experienced a significant drop of over 35% from its peak in December. This downturn occurred against a backdrop of diminished investor interest, evidenced by a net outflow of $40.95 million from spot Ethereum exchange-traded funds (ETFs) on Wednesday, which reduces total inflows to $3.1 billion.
Whale transactions appear to exacerbate the bearish sentiment, with reports from Lookonchain revealing that a notable whale deposited 20,000 tokens worth $52.8 million onto Kraken. This individual had previously sold 20,000 tokens in January and currently retains assets valued at $134 million. The actions of these large holders are often interpreted as negative indicators for the crypto market, given their experience and market influence.
In addition to the price drop, Ethereum has seen a decline in market share against competing blockchain platforms. Data from TokenTerminal indicates that Ethereum has accrued only $179 million in fees this year, trailing behind other networks such as Circle, Solana, Jito, Tron, and Tether.
The formation of a death cross on the daily chart further complicates Ethereum’s outlook, as it signifies a crossing of the 50-day and 200-day Exponential Moving Averages, a signal typically associated with bearish trends. Last August, Ethereum experienced a similar price decline of over 20% following the emergence of a death cross.
Ethereum’s failure to maintain the inverse head and shoulders pattern below the $2,821 mark adds to the bearish outlook. Additionally, the cryptocurrency has formed a double-top pattern at $4,100, with a critical neckline positioned at $2,140. If the price descends below this level, it could further decline to $1,530, marking the lowest swing from November.
Conversely, should the price rebound above the 200-day moving average at $3,090, it could negate the current bearish sentiment, indicating the possibility of upward movement.
In summary, Ethereum is navigating a precarious situation with the formation of a death cross, increasing whale sell-offs, and declining market share amid heightened competition. The technical analysis suggests risks of further price declines, particularly if it breaches critical support levels. Conversely, any upward momentum compelling price action above established moving averages could signal a shift in sentiment.
Original Source: crypto.news
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