Ethereum’s Wild Crash

Ethereum has been experiencing a wild crash over the last few days, breaking below several significant support levels. Investors are now wondering when this downtrend will end.

Technical Analysis

By Edris Derakhshi (TradingRage)

The Daily Chart

On the daily chart, the asset has been dropping rapidly since breaking below the 200-day moving average, located around the $2,900 mark.

The $2,700 and $2,350 levels have also been broken to the downside, with the price currently testing the $2,100 support zone. If this level also breaks down, a deeper decline toward the $1,750 level could be expected in the coming months.

The 4-Hour Chart

Things are not looking good on the 4-hour chart for ETH, as the asset has been consistently making lower highs and lows over the last couple of months.

Currently, the $2,100 support level is holding the price. A temporary recovery could be probable if ETH breaks above the $2,400 level. However, if the $2,100 area is lost, a much worse drop would likely follow for Ethereum.

Sentiment Analysis

By Edris Derakhshi (TradingRage)

Open Interest

Many analysts and investors blame the futures market for Ethereum’s massive crash in recent weeks. However, an analysis of the open interest metric indicates this might not be the case this time.

The open interest metric measures the number of open futures contracts. While the price has significantly dropped, the open interest is not declining as it should be and is still lagging.

This suggests that the recent price action is not solely due to long liquidation cascades, and most selling pressure comes from the spot market. It also warns investors that things could worsen if a larger liquidation event occurs.