Ethereum price has been under intense pressure in the past few days as sentiment in the past few weeks. The ETH price is trading at $3,315, which is about 19% below this month’s high of more than $4,000. The network has a market capitalization of more than $386 billion.
Why is ETH struggling?
There are three main reasons why Ethereum is struggling. First, this weakness is mostly because of its correlation with the blockchain industry. In the past few days, the price of most cryptocurrencies has dropped, with Bitcoin falling from more than $52,000 to about $44,000. Similarly, other popular coins like Cardano, Stellar, and Dogecoin have all retreated.
Second, the performance of the Decentralized Finance (DeFi) industry has also affected the industry. The total value locked of key DeFi platforms tracked by DeFi Pulse has fallen from more than $90 billion to more than $84 billion. This is notable since most DeFi platforms are built using Ethereum’s technology.
Third, the Ethereum price performance is also because investors have taken a breather from the spectacular rally. In most periods, the price of a cryptocurrency tends to retreat after a major rally. In this case, Ethereum was already up by more than 100% within a few weeks.
Still, there is some encouraging on-chain data. According to Glassnode, the number of active accounts has risen. The same is true with accounts with non-zero balance. Also, the total gas used has remained relatively stable in the past few days.
Ethereum price prediction
The daily chart shows that the ETH price has been in a strong bearish trend recently. However, we see that the pair has found a strong support at the $3,000 level. It is also between the 25-day and 50-day moving average (MA). The current range coincides with the area of the previous bullish pennant pattern that is shown in red.
Notably, Ethereum seems to have formed a bearish pennant pattern. Therefore, while it is too early to tell, there is a likelihood that the coin will have a bearish breakout. If this happens, the next key level to watch will be at $3,000. A drop below that level will open the door to more weakness. Still in the long-term, I suspect that the coin will rise to more than $4,000.
