Ethereum (ETH) is experiencing a significant decline as its price is rapidly approaching the crucial support level at $3,051. This sharp decline highlights the increasing selling pressure and growing bearish sentiment in the market.
As Ethereum approaches this critical threshold, traders are closely watching its behavior for signs that it will stabilize or decline further. The support level at $3,051 has now become a pivotal point, defining the short-term direction of Ethereum price action and potentially paving the way for future moves in the cryptocurrency market.
This article aims to analyze the sharp decline in digital assets and its impact on the cryptocurrency’s price as it approaches the $3,051 support level. It also seeks to provide traders and investors with a comprehensive understanding of the current situation, possible scenarios if the support level holds or breaks, and risk management strategies in this volatile environment.
ETH price is currently trading at around $3,181, down 5.05% with a market cap of over $382 billion and a trading volume of over $18 billion at the time of writing. In the last 24 hours, there has been a 5.25% decrease in ETH market cap and a 74.43% increase in trading volume.
Technical indicators point to a decline in Ethereum
Technical analysis of Ethereum price action on the 4-hours chart reveals that the crypto asset is actively bearish and is trading below the 100-day simple moving average (SMA). Ethereum has been consistently bearish since breaking the $3,360 mark and is currently heading towards the $3,051 support level.
The 4-hour Composite Trend Indicator analysis also shows that the ETH price may continue its downtrend as both the signal line and the simple moving average of the indicator have fallen below 50% and are trying to move into the oversold zone.
On the daily chart, the crypto asset recorded a sharp decline below the 100-day simple moving average and is trying to break below the ascending trend line while declining towards the $3,051 support level.
Finally, on the 1-day chart, the Composite Trend Oscillator is indicating another bearish move for ETH as both the signal and the simple moving average of the indicator are heading into the oversold territory.
What if the $3,051 support fails?
Analysis of the possible outcomes if Ethereum breaks the $3,051 support level reveals that if the digital asset breaks this level, it may move down to test the $2,865 support level and may move to test the $2,160 support level and other levels below if the price breaks this level.
However, if Ethereum price faces rejection at the $3,051 support level, it will start climbing towards the $3,360 resistance level. If the asset breaks this level, it may continue to rise to test the $3,659 resistance level and may move to test other higher levels if it breaks the $3,659 level.
Featured image by iStock, chart by Traadingview.com
