Ethereum (ETH), the world's second-largest cryptocurrency, is signaling a potential price decline in the coming days. Over the past three days, sentiment in the cryptocurrency market has shifted noticeably toward the bearish side, leading to substantial price drops.
Technical Analysis and Support Levels
ETH has broken out of a bearish Head-and-Shoulders pattern on the daily timeframe, breaching a crucial support level at $3,250. This breakdown has pushed traders toward short positions, which could influence ETH's price in the coming days. Historically, $3,250 has been a strong support level, but this time, ETH has failed to hold it. If ETH closes a daily candle below $3,200, there is a strong possibility of an 11% drop, taking it to the $2,850 support level.
Bearish On-Chain Metrics
According to Coinglass, the long/short ratio stands at 0.884, indicating strong bearish sentiment among traders. Currently, 53.07% of top traders hold short positions, while 46.93% hold long positions.
Current Price Momentum
ETH is trading near $3,225, having experienced a price decline of over 1.65% in the past 24 hours. However, its trading volume has dropped by 29%, indicating reduced participation from traders and investors.
Current metrics and technical analysis suggest a potential further decline in Ethereum's price, necessitating close monitoring of market changes.
