Ethereum Price- Ethereum’s Bearish Outlook: Key Factors Driving ETH Below $3,000
Ethereum Price– For several weeks, Ethereum’s (ETH) price has been aiming to return to the $3,000 level, but this target has remained elusive. Multiple rejections, coupled with a relatively quiet broader market, have kept the second-most valuable cryptocurrency in a holding pattern. However, price action isn’t the only challenge facing Ethereum. In this analysis, we’ll explore other factors impacting ETH and what they could mean for its price in the short term.
Ethereum Revenue Takes a Hit
One of the most concerning issues for Ethereum is the sharp decline in its revenue. According to data from Artemis, Ethereum’s revenue has plummeted to its lowest point this year. This marks a dramatic shift from earlier in the year when Ethereum’s revenue peaked at $36 million in March. As of now, that figure has dropped to just $1.10 million, with the potential to fall below the seven-figure mark.
This steep decline can be traced back to the March 13 Dencun upgrade, which was designed to reduce transaction fees on the network. While this move was welcomed by users who had grown frustrated with high fees, it also slashed one of Ethereum’s primary sources of revenue. The decrease in demand for ETH as a result of lower fees and reduced transaction activity has only exacerbated the problem. With revenue down significantly, the pressure on Ethereum’s price has intensified.
Whale Activity Signals Potential Downtrend
Another critical factor to watch is the activity of Ethereum’s largest holders, commonly referred to as whales. These addresses, which hold over 10,000 ETH each, are closely monitored because their buying or selling actions can significantly influence the market.
Recent on-chain data from Glassnode, analyzed by BeInCrypto, shows a concerning trend. On August 23, the number of addresses holding 10,000 ETH or more stood at 947. However, as of now, this figure has dropped to 938, indicating that these whales have sold approximately 90,000 ETH in the past two weeks.
When the balance of these large holders decreases, it’s often a signal of potential downside risk for the price of ETH. If this selling trend continues, it could push Ethereum’s price below the $2,500 level, a critical support zone that many traders are watching closely.
Technical Analysis: Will ETH Break the $3,000 Barrier?
An analysis of Ethereum’s daily chart reveals that the cryptocurrency’s price has been highly volatile. ETH has made several attempts to break through the $2,800 resistance level, but each attempt has been met with rejection. This repeated failure to breach the $2,800 mark is largely due to insufficient buying volume. Simply put, there isn’t enough demand to drive the price higher.
Adding to the bearish outlook is the fact that Ethereum’s price is currently trading below the 20-day Exponential Moving Average (EMA). The 20-day EMA is a widely used technical indicator that helps traders determine the direction of the trend. When the price is above the EMA, it typically signals a bullish trend, whereas trading below it indicates bearish momentum.
With ETH currently below this key indicator, the risk of further downside pressure is high. In a highly bearish scenario, Ethereum’s price could fall to as low as $2,496 or even $2,341, both of which are significant support levels.
Will Buying Pressure Rescue Ethereum?
Despite the bearish signals, it’s important to note that the situation could change if there is a significant increase in buying volume. A surge in demand could help ETH reclaim the $2,800 level and potentially make another attempt at breaking the $3,000 barrier. However, for this to happen, Ethereum would need to see a substantial uptick in trading activity, something that has been lacking in recent weeks.
Investors and traders will be watching closely for any signs of renewed interest in ETH, particularly from institutional investors and large holders. If the current trend of whale selling reverses and buying pressure increases, it could provide the catalyst needed for a bullish breakout.
A Pivotal Moment for Ethereum
Ethereum finds itself at a critical juncture. With revenue down, whale activity signaling potential downside, and the price struggling to break key resistance levels, the next few weeks could be crucial for ETH. While the outlook is currently bearish, the situation could change if market conditions improve and buying volume picks up.
For now, traders should keep a close eye on the $2,500 support level and the 20-day EMA. A break below these levels could signal further downside, while a reversal in whale activity and increased buying pressure could pave the way for a return to $3,000. Ethereum’s short-term future hangs in the balance, and the coming weeks will reveal whether it can overcome these challenges or if more downside is on the horizon.
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