Selling Pressure May Increase in Ethereum Price – Here’s Why

Ethereum looks poised for significant losses after failing to overcome a critical hurdle in its trend. Selling pressure may continue if it fails to maintain the $1,700 support level despite market expectations of “Merge”.

Ethereum Continues Downtrend

ETH weakens as trading volumes decline in the cryptocurrency market.

The second-largest cryptocurrency by market cap looks poised to resume its downtrend after experiencing a rejection at the $2,150 resistance level. Although Ethereum successfully held $1,700 as support, it did not show enough strength to make any significant headway. Current market conditions may encourage investors to exit their positions in anticipation of new lows.

Ethereum is expected to complete its long-awaited “Merge to Proof-of-Stake” this year, which could act as a bullish catalyst, but the launch date is likely months away. Ethereum recently completed the Merge testnets and will then create a trial run on the Ropsten testnet. Considering that there is no final launch date in sight and sentiment in the crypto market is still high, Ethereum could face a major correction in the short term.

Considering that the technical pattern formed by Ethereum price (chart below) is a symmetrical triangle, the recent rejection could be followed by an increase in selling pressure. This technical pattern shows that Ethereum could enter a 64% downtrend after breaking the $2,500 support level on May 9.

A daily candle near $1,700 could further confirm the pessimistic outlook, resulting in a steep correction to the $900 level.

IntoTheBlock’s Global In/Out of the Money model supports the decline thesis. It shows that more than 2.24 million addresses are at a loss on their investments after purchasing 26.33 million Ethereum for between $2,130 and $2,400. These addresses may cause downward pressure by selling their holdings to avoid further losses in the event of another decline. In this case, the transaction history reveals that the most critical support level is between $400 and $1,330, with 13.26 million addresses holding more than 13.1 million Ethereum.

Considering the importance of the resistance wall between $2,130 and $2,400, Ethereum will likely have to turn this area into support for a chance to invalidate the drop.

You can check the price movements here.

Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, KoinFinans and the author of this content cannot be held responsible for personal investment decisions.

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