Ethereum (ETH), the world’s second largest cryptocurrency by market capitalization, appears bearish and poised for a price drop. The reasons for this include how ETH is lagging behind top assets like Bitcoin (BTC) and Solana (SOL), the current price action formation, the latest whale sell-off, and more.
Ethereum (ETH) Slow performance
With stable and dull performance compared to other assets, whales and investors have been dumping significant amounts of ETH in recent days. Recently, CoinPedia reported that a sleeping whale, holding 398,889 ETH worth $1.34 billion, offloaded 73,356 ETH worth $224 million.
This notable dump has created potential selling pressure on the asset and resulted in a shift in user sentiment.
Ethereum technical analysis and upcoming
According to expert technical analysis, ETH is currently exhibiting a bearish double-top price action pattern, accompanied by bearish divergence on both the daily chart and four-hour charts. Historically, when an asset forms these patterns, it often experiences a significant price decline.
Based on the current price action, if ETH closes a four-hour candle below the $3,250 level, there is a good chance that ETH will fall 8% and reach the $3,010 level in the coming days.
Currently, the asset is trading above the 200 Exponential Moving Average (EMA) on the daily time frame, indicating an uptrend. Meanwhile, the Relative Strength Index (RSI) suggests that the asset still has room for a price increase in the coming days.
The bearish outlook for ETH will be invalidated if it breaks a four-hour candle above the $3,400 level and closes.
Statistics in the chain indicate weak sentiment
As of now, ETH’s on-chain metrics support its bearish outlook. According to the on-chain analytics company Mint glassETH’s Long/Short ratio stands at 0.90, reflecting strong bearish sentiment among traders.
Additionally, open interest has fallen 5.4% over the last four hours and 1.75% over the last 24 hours. This drop in open interest suggests that traders are losing interest in ETH, leading to the liquidation of open positions.
Current price momentum
Currently trading around $3,315, ETH has registered a 2.1% price drop over the past 24 hours. During the same period, trading volume fell by 29%, indicating lower trader participation compared to the day before.