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Will Ethereum 2.0 save the ETH price from another 25% decline?

  • Ethereum price shows an uptick of sellers' transactions on the Volume Profile Indicator.
  • 10% of Ethereum circulating supply has been staked by investors suggesting optimism for Ethereum 2.0.
  • Invalidation of the downtrend is a breach above the $200-week moving average at $1,200.

Ethereum price could commence another liquidity hunt targeting $950. The bulls will need to step in soon to alter the bearish narrative, as market sentiment alone is failing to reach higher targets of anticipated bullrun.

Ethereum price needs to show support soon

Ethereum price shows early evidence of withdrawal from the market. Last week's trading session captured a 14% incline in price. The trade setups’ follow-up thesis mentioned that moving to break even was vital, and initial evidence to close positions would be a breach of the newly found ascending trend line. The trendline was supportive from July 5 to July 9 and was breached over the weekend near the $1225 levels. The 200-week moving average provided additional support just below $1,200 and failed to hold.

 Ethereum price currently trades at $1,145 as the bears have pierced through both barriers with an uptick in volume. What many traders may have thought was just a profit-taking consolidation turned out to be a full-on bearish blitz. At this point, It is hard to believe that the bears won't be able to grab liquidity at last week's entry-level of $1,122. A breach of this level could catalyze another retest of sub-$1,000 price levels in the short term.

tm/eth/7/11/22

ETH/USDT 3-Hour Chart

The bearish technicals presented, come amidst conflicting market sentiment. The decentralized intelligent contract token has had the lowest gas fees in the last two years. Additionally, long-term investors have a significant interest in Ethereum  2.0, also known as "Serenity." More than 10% of Ethereum's total circulating supply has been deposited into a staking pool, a pledge from investors not to sell the Ethereum price for short-term gains.

Still, the technicals do not lie. If the $1,100 is breached, a sub $1,000 Ethereum price will be inevitable. The next significant bullish barrier lies in the $950 region established in May. 

Invalidation of the bearish trend is a close above the 200-week moving average, currently priced at $1,200. If the bulls can conquer this barrier, they could trigger an additional rally towards $1,500, resulting in a 30% increase for the ETH price.

Author

Tony M.

Tony M.

FXStreet Contributor

Tony Montpeirous began investing in cryptocurrencies in 2017. His trading style incorporates Elliot Wave, Auction Market Theory, Fibonacci and price action as the cornerstone of his technical analysis.

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