Key Points

Ethereum’s price experienced a significant drop, falling from $3,633 down to $3,220 within a single day.

Despite this decrease, there is speculation that the altcoin could potentially retest the $4,000 mark.

Key Resistance Zone

A significant number of addresses accumulated Ethereum around $3,700, making this a key resistance zone.

Previously, Ethereum’s rise above $4,000 resulted in 89% of its holders making a profit.

However, the recent decline has created a sell wall at $3,700, where 991,000 Ethereum addresses purchased 4.35 million coins.

If Ethereum’s price climbs, holders trading below this region have a chance to break even.

If buying pressure exceeds the on-chain sell volume, Ethereum might surpass $3,700.

However, the cryptocurrency’s future is not solely dependent on the on-chain outlook.

The Exponential Moving Average (EMA) suggests a short-term bearish trend for Ethereum.

At the time of writing, the 20 EMA crossed below the 50 EMA, indicating a potential 7.30% drop in the cryptocurrency’s price.

The Aroon Indicator also supports this bearish bias, with sellers currently in control of the price action.

The Relative Strength Index (RSI) is in the oversold region, suggesting a potential bounce back if the reading continues to decrease.

In an optimistic scenario, Ethereum might rise to $4,500 once market turbulence settles.

Despite a gloomy short-term outlook, the Pi Cycle Top indicator suggests a more positive mid to long-term future for Ethereum.

Historically, this indicator has been used to predict when a cryptocurrency is nearing its market bottom or top.

If the 111-day moving average hits the same region as the 350-day moving average, Ethereum could reach the top of this cycle.

However, the 111-day moving average is currently lower than its counterpart, suggesting potential growth for Ethereum in the coming months.