Key Points
- Ethereum’s market structure could turn bearish if it drops below $3050.
- A strong selling pressure has been noted in the past 24 hours, with Ethereum and Bitcoin experiencing losses of 7%-8% each.
Ethereum could potentially face a bearish turn in its market structure if its value falls below $3050.
The momentum and selling pressure have been steadily increasing, which could lead to further losses.
The Market Scenario
In the past 24 hours, there has been a significant wave of selling pressure. Both Bitcoin [BTC] and Ethereum [ETH] have suffered losses of 7%-8% each, and a deeper drop seems likely. For Ethereum, the $3.5k level has been a crucial short-term support.
Crypto analyst Ali Martinez observed a potential bear pennant formation. If this formation materializes, Ethereum’s value could drop to $2.8k.
Based on the length of the flagpole of the pennant formation, a drop to $2.6k could be possible. The range of $2.8k-$2.9k was a consolidation region for Ethereum in February before it surged beyond $3k.
On-Chain Metrics and Market Sentiment
This range could act as support during a potential descent and repel bearish trends. In addition, the $3.1k region has previously seen a significant price reaction and could serve as a bullish order block.
Over the past two weeks, Ethereum’s trading volume has decreased, indicating a bearish pattern. The break below the rising trendline confirms this pattern. If Ethereum falls below $3056, it could flip the market structure bearishly on a 12-hour chart.
Some of Ethereum’s on-chain metrics show positive signs for investors. The 30-day MVRV ratio has been below zero since March 18th, indicating an undervalued asset. However, the mean coin age, which had been trending downward since February 9th, has started to trend higher.
Despite the potential bearish turn, the network growth in March compared to January shows that an increasing number of new addresses were created on the network.
The total Open Interest fell alongside the price, indicating short-term bearish sentiment. However, even a drop to $3.1k or $2.6k could still present a buying opportunity for long-term holders.
