Ethereum (ETH) seems to be turning around its bad luck as it has rallied 18% from the previous weekly low. Does this mean Ethereum price has bottomed? Here are three reason why ETH could drop lower.
3 Reasons Why Ethereum Price Could Continue its Descent
Ethereum price has tagged the 2018 ATH of $1,385, which has many believing that this could be the bottom. However, there are three critical reasons why a further crash could be possible for ETH.
Reason 1: Weekly Price Chart Shows Key Resistance Level
The 1-week TradingView chart shows that Ethereum price is revisiting $1,630, which is the highest volume traded level since February 2021. Since the recent crash pushed ETH below it, it is upon bulls to flip this hurdle into a support floor. As long as this resistance level stands, there is a good chance ETH’s value will continue to depreciate.
Moreover, the intermediate demand zone at $1,280 is the next Ethereum price support floor that could absorb selling pressure. After this area from, $1,280 to $1,160, was fromed in December 2022, the price of ETH shot up more than 40% in the next three to four weeks without any pullbacks. Hence, a revisit of this zone is also likely.
The absolute key support or demand zone extends from $890 to $715, which is a weekly buy-side imbalance that led to near 50% weekly candlestick.
Reason 2: RSI Yet to be Oversold
On the weekly chart, the Relative Strength Index (RSI) has not yet hit oversold territory. All the major rallies for Ethereum price have begun after RSI tagged an oversold level. Hence, the chances of a further drop are likely for ETH, potentially into the $1,280 to $1,160 and $890 to $715 zones.
Reason 3: Uncertain Macroeconomic Conditions
From a macroeconomic perspective, the Trump and Xi trade war between the US & China has caused additional volatility in the stock and crypto markets. This has left Ethereum price prediction bearish due to fears of recession.
Additionally, this week has two major events: Fed Chair Powell’s speech and the March inflation announcement. The outcome of both critical news events could induce additional volatility that could kickstart a messy collapse.
So, overall, the outlook for Ethereum price remains neutral-to-bearish. However investors need to be more cautious ahead of the upcoming events amid Trump-Xi trade war.
The post Has Ethereum Price Bottomed? 3 Reason Why ETH Could Crash More appeared first on CoinGape.
