Ethereum Collapses 32% in a Week

Ethereum has seen a significant decline of 32% over the past week, with an 18% drop in the last 24 hours, marking the largest dip in the crypto market this year.

The daily chart for Ethereum shows a notable decline, with the price currently at $2,350, down by 12.35% for the day. This drop positions Ethereum below the lower Bollinger Band, which stands at $2,650, indicating that the asset may be oversold.

The Bollinger Bands reveal heightened volatility, with a significant expansion. Ethereum’s position below the lower band typically suggests overselling, potentially leading to a bounce back unless bearish pressure continues.

Ethereum’s On-Balance Volume (OBV) supports this bearish sentiment, currently at 43.49 million. The sharp decline in OBV, in line with the price drop, indicates substantial sell pressure. If the OBV continues to decrease, it may signal persistent selling and further declines in Ethereum’s price.

Ethereum Weekly Chart at Critical Condition

The weekly chart does not offer much solace for Ethereum. The price has broken below the lower Donchian Channel at $2,111. The upper and middle Donchian Channels are at $3,977 and $3,044, respectively.

This breach of the lower channel signals a strong bearish trend, as it marks new lows not seen in the past 20 trading periods. A weekly close below this level could indicate further downside risk.

The Relative Strength Index (RSI) on the weekly chart stands at 38.55, down from a recent high of 54.90. If the RSI drops below 30, it would confirm an oversold condition, suggesting a potential short-term bounce around the $2,800 mark. However, the current trend shows weakening momentum, and unless there is a strong reversal, ETH’s downward pressure could persist.

What Next for Ethereum?

Ethereum’s immediate future depends largely on its ability to reclaim key support levels. On the daily chart, a recovery above the lower Bollinger Band at $2,650 could stabilize the price.

On the weekly chart, moving back within the Donchian Channels, particularly above the middle band at $3,044, would be a positive sign. However, if the current bearish momentum continues, Ethereum could test lower support levels around $2,000, with further declines possible if broader market conditions remain unfavorable.

Analysts argue that Ethereum might stabilize around its current levels in the short term before potentially experiencing another leg down, especially if macroeconomic conditions, such as rate cuts, play out similarly to past market cycles.

Market veteran Peter Brandt suggests that Ethereum is close to hitting its floor. With a rectangle pattern ranging from $4,500 to $2,814, the downside bottom is calculated to be around $2,000, indicating this target is almost fulfilled.

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