Key Takeaways
Earlier in the week, Ethereum’s (ETH) price showed readiness to retest $2,000. However, after several attempts, that did not happen, with the cryptocurrency falling to break above key resistance levels.
As of this writing, ETH trades near the price in October 2023, which was close to the end of the last cycle’s bear market. Despite this underwhelming performance, optimism around Ethereum remains elevated.
However, this sentiment might not be enough to keep Ethereum’s price from trending lower. Here is why.
Ethereum to Encounter Supply Wall
From an on-chain perspective, Ethereum’s price could face significant resistance around the $1,900 level. According to data from IntoTheBlock’s In/Out of the Money Around Price (IOMAP), nearly 3 million addresses acquired over 6 million ETH within this price range.
Notably, these holdings are currently sitting at an unrealized loss. In on-chain analysis, zones with high volumes of profitable addresses tend to act as support, as holders are less likely to sell.
However, when many addresses are holding at a loss—like at $1,900—selling pressure may increase as traders seek to break even, creating resistance.
As a result, Ethereum’s attempt to reclaim the $2,000 mark may be met with intensified selling near $1,900, potentially stalling upward momentum.
ETH In/Out of Money Around Price | Credit: IntoTheBlock
Sentiment Bullish
Despite this overhead resistance, data from Santiment shows that the Weighted Sentiment reading has remained in the positive region.
Weighted Sentiment uses social data to check the remarks about a cryptocurrency online. When the rating is positive, it means most comments about the asset are bullish.
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However, a negative reading implies dominant pessimistic remarks. As of this writing, ETH’s Weighted Sentiment was 0.13, indicating that many market participants are optimistic about Ethereum’s price recovery.
ETH Price Analysis: Drop Below $1,600 Looms
From a technical point of view, ETH’s price has failed to bounce above the 20-day Exponential Moving Average (EMA). The 20 EMA (blue) is a key support level.
So, failing to rise above it indicates a bearish trend. If this lingers, then ETH might keep trading much below $2,000.
In addition to that, the Bull Bear Power (BBP) is stuck in the negative region. The BBP measures the strength of bulls (buyers) against that of bears (sellers).
Positive readings of the BBP indicate rising buying pressure, which could precede a price increase. But since it is the other way around, Ethereum’s price will likely trade lower.
Should selling pressure continue to rise, the next target for ETH could be a decline to $1,520.
However, if the optimism around the cryptocurrency translates to increased demand in large volumes, this trend might change.
In that scenario, Ethereum’s price might climb to $2,130. If this accelerates, ETH could retest $2,500.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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