Ethereum, Frustrated by $2,400 Barrier... Is a Bear Market Inevitable?

▲ Ethereum (ETH)

Ethereum (ETH) is facing strong downward pressure after failing to break through the technical resistance level of around $2,400 four times.

According to a report by virtual asset media outlet Cointelegraph on April 27 (local time), Ethereum's price recently turned bearish, forming a triple-top pattern on the daily chart. Since April 14, Ethereum has failed to surpass the $2,400 mark and has been trading below its 100-day moving average. Virtual asset analysts interpret repeated failures to break resistance as strong absorption of supply by sellers, indicating a rapid weakening of short-term upward momentum.

Ethereum's price decline is also evident in its relative weakness against Bitcoin. Michaël van de Poppe, founder of MN Capital, pointed out that the ETH/BTC pair, the price ratio between Ethereum and Bitcoin, has fallen below 0.032 BTC, losing a key support level. Poppe predicted that Ethereum is likely to fall further to its next support level of 0.026 BTC in higher time frames. This suggests that Ethereum's market dominance is weakening as asset inflows in the market are concentrated on Bitcoin.

Futures position indicators within the market also support the downside risk. Currently, Ethereum's open interest on Binance has fallen to $2.58 billion, showing a massive liquidation of leveraged positions. The funding rate also plummeted to its lowest level since February, recording -0.013%. With short positions dominating the market and the risk of long position liquidations increasing, downward price pressure is being maximized.

From a technical perspective, Ethereum's fate hinges on its ability to hold the $2,150 support level. Analyst Amr Taha warned that approximately $2.5 billion worth of long position liquidations are concentrated around the $2,150 mark. If the price fails to hold this support level and breaks down, forced selling could cascade, causing the price to plummet to the $2,050 to $1,900 range. Currently, Ethereum is exploring its direction between support and resistance, bracing for extreme volatility.

The movements of the Ethereum Foundation and whales are also contributing factors to market anxiety. Despite a 10% price increase throughout April, evidence of the Ethereum Foundation selling off its holdings has been detected, dampening investor sentiment. Market participants unanimously agree that a cautious approach is needed until the imbalance between on-chain data and futures indicators is resolved. Ethereum stands at a critical juncture, needing to overcome the dual challenges of technical resistance and the risk of large-scale liquidations.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*