Ethereum Drops Below $2,400 Amid DeFi Boom: Why The Divergence?

Ethereum is trending lower, looking at the performance in the daily chart. The coin is below $2,400, pointing to weakness, and bear bars are beginning to band along the lower BB. Therefore, unless there is a shift in momentum favoring buyers in the coming days, ETH might continue trickling lower. At this pace, the first target would be $2,100. However, if there is more dumping, the second most valuable coin could contract, breaking below $2,000.

The state of affairs in the daily chart shows in how the coin performs in the past day and week. To put in the numbers, Ethereum is now down 1% in 24 hours, pushing losses of the last week to over 5%. Evidently, sellers are in control, at least for now. The only concern for bears, at least in the short term, is the dip in engagement. The average trading volume is down to $13 billion on the last day.

Traders are keeping tabs on the following trending Ethereum news:

• As Ethereum trends lower, its DeFi ecosystem is building. Synthetix, one of the earliest finance protocols, is building its platform using Optimism technology. The app chain, built on the SuperChain, will be dubbed SNAXchain.
• EigenLayer, the largest liquidity staking platform for Ethereum, plans to distribute 86 million EIGEN, their native token, to stakeholders via Season 2 “Stakedrop.” The distribution ends on September 17 but will target users who interacted with the protocol between March 15 and August 15.

Ethereum Price Analysis

ETH/USD is weak at spot rates.

Even as its ecosystem explodes, ETH is under pressure.

The local resistance is at $2,400, while a breakout above $2,800 would mark a significant shift in trend.

Every high below $2,400 may offer sellers an opportunity to sell, targeting $2,100.

Conservative traders, on the other hand, can wait for a clean break above $2,800 or below $2,100 before committing.

A recovery placing ETH above $2,800 may see the coin bounce to $3,500 in a refreshing trend shift.