Ethereum (ETH) has been on a sharp decline, with its value tumbling 16% in the past week alone. The cryptocurrency, which reached an intraday high of $2,138, has since dropped to $1,861—its lowest level since December 2023. The key question now is whether ETH can rebound or if further losses are on the horizon.
Bearish Signals and Investor Sentiment
Data from Glassnode reveals that only 50% of Ethereum holders remain in profit, a stark contrast to the 82% recorded at the beginning of the year. As market confidence wavers, many investors are offloading their holdings—some even at a loss—further contributing to ETH’s downward trajectory.
Technical indicators paint a grim picture. According to TradingView, ETH has been trading below the Ichimoku Cloud since January 25, a strong indication that the market remains bearish.
Massive ETH Outflows Suggest Long-Term Holding
Despite the price decline, on-chain analytics from Lookonchain report that $1.8 billion worth of ETH exited exchanges last week—the largest outflow since December 2022. Typically, such movement suggests that investors are transferring assets to private wallets, a sign of long-term holding and potential future recovery.
Will Ethereum Plunge to $1,300?
If Ethereum’s current downtrend continues, the next critical support level stands at $1,300. Should ETH fail to hold above $1,700, analysts warn of significant liquidations that could deepen the losses and prolong market recovery.
Conversely, a surge in demand could propel ETH back toward $4,045—marking a potential 120% gain from its current levels. However, with market sentiment still bearish, such a rebound remains uncertain.
For now, Ethereum faces a critical test at $1,700. If this level breaks, a steeper decline could follow, making recovery an uphill battle.
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