Ethereum Fails To Impress: Is Another 20% Drop To $2,600 Incoming?

Ethereum is slipping, looking at the formation in the daily chart. Despite hopes of recovery, sellers didn’t let loose, doubling down instead. So far, the selling momentum is high, and ETH bear bars are banding along the lower BB. If this continues, sellers will likely break away, forcing the coin towards the $2,600 zone in continuation of the bear momentum of mid-March 2024.

Presently, traders are hopeful, but bears appear to be in control. Ethereum is down 15% in the previous trading week. Moreover, market participants have taken a wait-and-see approach, looking at the fast-shrinking trading volume. In the last trading day alone, it fell 4% to around $22 billion.

Even so, investors and Ethereum supporters are looking as the following events unfold:

• On-chain activity on Ethereum is slumping as developers prefer options like Solana and Base. This development suggests that users might be engaging slowly with native protocols. The drop has seen gas fees also contract in tandem.
• With crypto prices falling, trackers show that Ethereum is trading at a three-year low versus Bitcoin. The drop means more users are flowing to BTC; an asset that continues to enjoy regulatory clarity.

Ethereum Price Analysis

ETH/USD price, like Bitcoin, is within a bear breakout formation, and under immense selling pressure at press time.

The failure of bulls to flow back and drive the coin above the April 13 highs is a concern.

As it is, every high may represent selling entries for aggressive traders targeting $2,600 in the short term.

Any break above $3,300 may offer relief for optimistic buyers. However, a close above $3,700 will cancel the bearish outlook, paving the way for $4,000 and even a retest of 2021 highs  in the medium term.

Conversely, any dump below $2,800, confirming the bear bar of April 13, may see Ethereum drop to $2,600 in the short to medium term.