Key Points
- Ethereum (ETH) is trading at a significant support level within a descending channel.
- Key technical indicators suggest a potential further decline in Ethereum’s value.
The prominent altcoin, Ethereum (ETH), is currently holding onto a pivotal support level as its price moves within a downward trend.
Descending Channel
A descending channel is characterized by a series of lower highs and lower lows, indicating an overall downward trend.
Daily chart analysis of Ethereum’s price movements reveals the formation of this descending channel since March 12, with the coin’s value decreasing by 28% since then.
As per CoinMarketCap’s data, Ethereum was trading at $2915 at the time of writing.
Potential Price Decline
If Ethereum bulls are unable to maintain the current support level of $2,850, the price may start to fall below the lower trendline of the descending channel, potentially leading to a trading price of $2600.
Various key technical indicators suggest a possible break below the current support level.
Ethereum’s key momentum indicators show that sell-offs are surpassing accumulation among market participants.
The coin’s Relative Strength Index (RSI) and Money Flow Index (MFI) were below their neutral points, with RSI at 39.52 and MFI at 49.39.
The Elder-Ray Index for Ethereum returned a negative value, reinforcing the bearish trend and indicating a dominance of bear power in the market.
Similarly, the dots of Ethereum’s Parabolic SAR were located above its price, a position they have maintained since the start of May.
The Parabolic SAR indicator is utilized to identify potential trend directions and reversals. When its dots are above an asset’s price, it signifies a declining market.
If Ethereum bears manage to break below the current support level, the next price point could be $2780. Conversely, if this prediction is not realized, the altcoin might rally above $3000.
