Ether (ETH) has fluctuated around $3,000 for the last three weeks, marking a consolidation period after its flash crash to $2,620 on Nov. 21. Ether traders are now assessing the potential for further correction if the support at $2,800 fails.
Key takeaways:
Ether dipped below $3,000 again due to weak futures demand and aggressive selling from long-term holders.
Reducing Ethereum network fees and activity indicate lower on-chain demand.
Weak technical setups suggest a decline to $2,300 if the next support level is breached.
ETH price trapped between trendlines
Ether’s recent bounce was curtailed by resistance from the 50-day exponential moving average (EMA), currently at $3,260, as illustrated in the daily chart below.
Related: Ether price trend predicts triple-digit rally as ETH ETF inflows resume
This movement, however, led ETH/USD to find support in the $2,800-$2,600 demand zone, with the 200-week EMA situated within this range.
ETH needs to overcome the resistance at $3,000 and move past the 50-day EMA to exit consolidation for a sustained recovery towards $4,000.
The Glassnode cost basis distribution heatmap indicated resistance between $3,100 and $3,250, where approximately 5.9 million ETH were acquired.
The critical support level lies near $2,800, where 5.8 million ETH were previously purchased.
Ether price lacks bullish drive
Ether futures are trading at a 3% premium compared to bearish ETH spot markets, indicating declining demand from leveraged buyers.
Under bearish conditions, futures premiums typically remain below 5%, showing weak demand for leveraged long positions and a lack of optimism among traders.
Alarmingly, even last week’s rise to $3,750 failed to rekindle sustained bullish sentiment among traders.
The bearish trend in Ether futures coincided with a decrease in long-term holder supply, which has fallen by 847,222 coins over the last 30 days, marking the largest drop since January 2021. This adds to the sell-side pressure that prevents ETH from holding above $3,000.
Ether’s struggle to maintain above $3,000 is also linked to a reduction in Ethereum network fees, an issue affecting the wider cryptocurrency market.
Ethereum chain fees amounted to $15.1 million over the last 30 days, representing a 45% decline from the previous month. In contrast, fees on BNB Chain fell by 56%, and Tron experienced a 15% drop.
While the number of active addresses on Ethereum’s base layer increased by 3.5% during the same period, it dropped by 14% in the last seven days. The transaction count also fell by 11% over a seven-day stretch.
Ether bears aim for $2,300 ETH price
The ETH/USD pair has confirmed a bear flag on the daily chart after dropping below its lower boundary at $3,200, as depicted below.
“Ethereum is consolidating following a sharp sell-off, forming a bear flag beneath prior support around the 3,173 to 3,250 range,” expressed analyst Danny Naz in an X post on Sunday, adding:
“That area has shifted to resistance.”
The anticipated target of the flag is $2,300, indicating a 22% decrease from the current price.
Focusing on the 12-hour timeframe, a break and close below the lower trendline of a megaphone pattern at $2,800 would pave the way for a deeper correction, targeting the measured point of the pattern at $2,376.
This move would represent an 18% decrease from the current price.
If this support fails and bears manage to push the price below $2,800, ETH could decline to the next support range of $2,716 to $2,623.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
