Is It Possible for Ethereum to Reverse Its Downtrend Before the End of April?
2022-04-28 16:51:22
Is Ethereum Still A Good Investment If It Stays In A Downward Trend?
The whole market is bleeding. Bitcoin price drops to its ‘macro level support’ at $38K while Ethereum revisits $2.8K. Following the two leading cryptocurrencies, no altcoin is immune to the sell-off. However, not only has the cryptocurrency market crashed, but also the wider global financial markets fell under pressure after the hype surrounding Elon Musk's acquisition of Twitter began to fade.
As concerns about the state of the global economy took the forefront again, risk assets, especially cryptos, suffered sharp declines in prices for being persona non grata in these turbulent markets.
Data from Gate.io shows that after holding support at $40,500 through the early trading hours on April 26, the price of Bitcoin dumped 6.21% in afternoon trading to hit a low of $38,009. As of April 28, BTC is still struggling at $39,000. Ethereum also started a new decline from the $3,030 resistance against the US Dollar on Tuesday and even spiked below $2,800. Currently, the ETH price has bounced back upon this level but is still below $2,900.
Technical analysis for the price of Ethereum finds that a key bearish trend line is forming with resistance near $2,910, to start a decent recovery in the near term, the price has to stay above the $2,800 support. If not, Ether could continue to move down. The first major support then is near the $2,765 level, followed by the $2,650 zone, below which hides a risk of a move towards $2,500.
By contrast, a clear move above the $2,910 resistance, the critical trend line, which is near the 50% Fib retracement level of the recent decline from the $3,041 high to $2,766 low, might start another increase. After that, the ETH price is able to touch the $2,950 zone while any more gains may send this leading altcoin towards $3,030.
Industry experts and crypto analysts had high hopes for Ethereum and its price when it crossed the $4,000 resistance successfully last year, predicting that it might grow by almost 400% by the end of 2022. Unfortunately, this coin has been on a downtrend in 2022. It started the year with $3676.18, and hit the lowest price of the year so far on January 24 at $2160.00. After losing $3,000 again, the price of Ethereum is having a hard time crossing this major resistance level.
There are several factors that lead to Ether's tumbling, the most prominent one at present seems to be its delay in launching the ETH 2.0 upgrade. On April 11, Tim Beiko, Ethereum’s principal developer, announced on Twitter that the planned June deployment had been postponed as testing proceeded. It has become a consensus that the Ethereum merge forms a key part of the ETH 2.0 upgrade, while this important process was delayed until the latter half of this year, investors seem to be kind of impatient as delays occur too often.
In the meanwhile, on-chain data also hints at further downside for ETH price. The Ethereum network's TVL flattened in the last 30 days at 27 million Ether according to Defi Llama. Ethereum now has an average daily active address of 584,477, which is a 4% decrease from 30 days ago. This means that ETH transactions are not showing signs of growth while potential investors are not willing to buy Ethereum.
The whole market is bleeding. Bitcoin price drops to its ‘macro level support’ at $38K while Ethereum revisits $2.8K. Following the two leading cryptocurrencies, no altcoin is immune to the sell-off. However, not only has the cryptocurrency market crashed, but also the wider global financial markets fell under pressure after the hype surrounding Elon Musk's acquisition of Twitter began to fade.
As concerns about the state of the global economy took the forefront again, risk assets, especially cryptos, suffered sharp declines in prices for being persona non grata in these turbulent markets.
Data from Gate.io shows that after holding support at $40,500 through the early trading hours on April 26, the price of Bitcoin dumped 6.21% in afternoon trading to hit a low of $38,009. As of April 28, BTC is still struggling at $39,000. Ethereum also started a new decline from the $3,030 resistance against the US Dollar on Tuesday and even spiked below $2,800. Currently, the ETH price has bounced back upon this level but is still below $2,900.
Technical analysis for the price of Ethereum finds that a key bearish trend line is forming with resistance near $2,910, to start a decent recovery in the near term, the price has to stay above the $2,800 support. If not, Ether could continue to move down. The first major support then is near the $2,765 level, followed by the $2,650 zone, below which hides a risk of a move towards $2,500.
By contrast, a clear move above the $2,910 resistance, the critical trend line, which is near the 50% Fib retracement level of the recent decline from the $3,041 high to $2,766 low, might start another increase. After that, the ETH price is able to touch the $2,950 zone while any more gains may send this leading altcoin towards $3,030.
Does Ether have upward momentum?
Industry experts and crypto analysts had high hopes for Ethereum and its price when it crossed the $4,000 resistance successfully last year, predicting that it might grow by almost 400% by the end of 2022. Unfortunately, this coin has been on a downtrend in 2022. It started the year with $3676.18, and hit the lowest price of the year so far on January 24 at $2160.00. After losing $3,000 again, the price of Ethereum is having a hard time crossing this major resistance level.
There are several factors that lead to Ether's tumbling, the most prominent one at present seems to be its delay in launching the ETH 2.0 upgrade. On April 11, Tim Beiko, Ethereum’s principal developer, announced on Twitter that the planned June deployment had been postponed as testing proceeded. It has become a consensus that the Ethereum merge forms a key part of the ETH 2.0 upgrade, while this important process was delayed until the latter half of this year, investors seem to be kind of impatient as delays occur too often.
In the meanwhile, on-chain data also hints at further downside for ETH price. The Ethereum network's TVL flattened in the last 30 days at 27 million Ether according to Defi Llama. Ethereum now has an average daily active address of 584,477, which is a 4% decrease from 30 days ago. This means that ETH transactions are not showing signs of growth while potential investors are not willing to buy Ethereum.
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