Ethereum (ETH) Price Fights to Hold $2,500 as Bearish Sentiment Dominates

Key Takeaways

• Ethereum (ETH) trades inside the long-term support at $2,450.
• ETH also trades inside a long-term ascending parallel channel.
• Will ETH break down or will it bounce at support instead?

Ethereum has been one of the most disappointing cryptocurrencies in the current bull run. It started its delayed upward movement in October 2023 and made up lost ground until March 2024. However, it has fallen since.

ETH is also underperforming the market, with weaker-than-average bounces and stronger-than-average dips. Ethereum bearish sentiment is also growing stronger each day.

Let’s analyze the Ethereum price action in multiple time frames and determine if there is any hope left for the bulls.

Bearish Ethereum Sentiment

Sentiment on X has been extremely bearish for most of the year. Camilla Russo stated that the community leaders are blaming the people for the underperformance instead of acknowledging what’s wrong with the chain.

One of the major problems she mentions is that Layer-2s are parasitic to Ethereum since only a small portion of the value accrued from their activities goes to Ethereum.

Jack believes that Solana is replacing the network as a whole and gradually taking all of its users.

Sean Mackey outlined the merits of Bitcoin against Ethereum, noting that the ETH/BTC chart is at March 2016 levels. Considering Ethereum’s higher volatility, he questions the merits of holding ETH or any other altcoin for that matter, when in the long-term they all trend downward against BTC.

One of the last bulls standing is Ryan Adams, who said you have to go against the grain and double down on ETH, instead of falling prey to sentiment and selling.

ETH Struggles Above Support

The weekly time frame ETH chart shows that the price trades above a long-term horizontal support level at $2,450. The area has acted as both support and resistance since 2021. More recently, ETH validated it twice (white icon) in August and September 2024.

Ethereum is in the process of bearish engulfing candlestick, which if confirmed, would go a long way in predicting an eventual breakdown.

The ETH price has also traded alongside a long-term ascending parallel channel since June 2022. Breaking down from the channel will indicate that the upward movement is over and that a new bearish trend has started.

It is interesting to note that the weekly Relative Strength Index (RSI) has fallen below 50 (black circle). This is a bearish sign and never happened during the previous bullish cycle (highlighted).

However, the Moving Average Convergence/Divergence (MACD) shows bullish signs, since its momentum is strengthening (black arrow).

So, the weekly time frame does not give a clear direction for the future trend.

Will ETH Price Break Down?

The daily time frame readings are also mixed. On the bearish outlook, Ethereum’s price could be trading inside an ascending parallel channel, considered a corrective pattern.

If so, it is currently in the channel’s lower portion, after the previous bounces failed to reach the resistance trend line. Both are considered bearish signs.

Technical indicators are leaning bearish. The RSI just declined under 50 while the MACD made a bearish cross (black circle), even though it is above 0.

However, the wave count offers some hope for the bulls. The price may be creating a large 1-2/1-2 wave formation and is currently in sub-wave two (black) of wave three.

If so, the correction is an irregular flat structure and will end at the channel’s support trend line near $2,380.

Afterward, a breakout from the channel will accelerate the upward movement. So, similarly to the weekly time frame, the daily one also gives inconclusive readings.

Inconclusive Trend

The weekly and daily time frame ETH readings both give mixed signs, failing to determine the trend’s direction. Whether the ETH price bounces or breaks down from the $4,500 area could help determine if the trend is bullish or bearish.

While Ethereum sentiment is bearish, this has likely occurred due to the underperformance and might not be a reflection of future performance.