Ethereum has been inching lower after breaking below the support level at the bottom of its long-held trading range
This decline has come about despite Bitcoin showing some signs of stability within the lower-$9,000 region
ETH is now trading at a crucial support level that buyers are attempting to defend, as a break below it could be dire
Analysts are now noting that for the first time in a long time ETH is showing signs of macro weakness
This could mean that major downside is imminent
Ethereum has been generating massive on-chain activity in recent times. Multiple metrics detailing its usage have surged to all-time highs, and the crypto, by most means, appears to be fundamentally robust.
That being said, this has not been enough to invalidate the technical weakness it has been seeing in recent times.
The divergence between its fundamental strength and technical strength may be due to the booming DeFi trend, which doesn’t directly lead to value accrual for ETH’s price – at least not at this time.
One analyst is even noting that Ethereum is starting to flash some signs of having macro weakness from a technical perspective.
The same analyst believes that this technical weakness could be further compounded by a potential miner-induced selloff stemming from a recent surge in outflows to exchange wallets.
Ethereum Shows Signs of Having “Macro Weakness”
At the time of writing, Ethereum is trading down marginally at its current price of $229. This is around the level at which it has been hovering throughout the past day.
ETH has been caught within a trading range between $230 and $250 over the past few months, and each dip below this range’s lower boundary has been fleeting in the past.
Analysts are noting that this time may be different. One prominent pseudonymous trader explained that the consecutive closes beneath $230 have given rise to the first “major signs” of bearishness it has seen in quite some time.
“ETH HTF Update: Priced has closed below $230 for nearly two consecutive weeks, this weeks wick is looking pretty nasty right now with a huge rejection over the past few days… First major signs of bearish PA showing up on HTF charts,” he explained.
Image Courtesy of Cactus. Chart via TradingView.
Here’s Another Factor that Could Adversely Impact ETH
Analysts are also closely watching miner outflows as a factor that could have a grim impact on Ethereum.
As Bitcoinist reported yesterday, the same trader explained that he is growing cautious about Bitcoin and Ethereum’s near-term outlooks due to this bearish catalyst.
“While I am super bullish on both BTC & ETH over the next 12/24 months, over the past week there has been a huge spike in miners moving funds on exchanges… This is usually followed by large drops in PA,” he said.
Image Courtesy of Glassnode.
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Charts from TradingView.
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