Ethereum (ETH) faced a tough day in the market as it dropped below the critical $2,300 mark on Wednesday. This decline follows the US Federal Reserve’s decision to hold its interest rates steady in the range of 3.50% to 3.75%. With an 8-4 vote from the Fed, and the push from three regional bank presidents to eliminate any “easing bias,” risk assets like cryptocurrencies are feeling the brunt of this cautious stance.
After touching a low of $2,220, ETH is now notably consolidating just above that level, moving within a deteriorating trend. The price recently broke below a rising channel that previously provided support at the $2,295 level on the hourly chart.
Exchange Reserves Signal Increased Selling Pressure
In a worrying trend for ETH holders, exchange reserves have surged by approximately 226,000 ETH over just three days, according to data from CryptoQuant. Such an influx usually indicates that more coins are available for sale, exacerbating the price decline.
Recent wallet activities also raise flags, with specific addresses linked to major entities such as Fenbushi Capital and Genesis Trading sending substantial amounts of ETH to exchanges within the past 24 hours. Notably, an Ethereum ICO participant, whose wallet remained dormant for nearly 11 years, transferred 10,000 ETH into circulation.
Amid these developments, retail investors further amplified the downward pressure by offloading over 750,000 ETH combined in recent days. The Coinbase Premium Index, which measures US buyer interest, has turned negative, indicating reduced inflows. Moreover, US spot ETH ETFs recorded two consecutive days of net outflows, as per data from SoSoValue.
Interestingly, the staked ETH supply witnessed a decline of 140,000 ETH over the past week. This downturn led to a dramatic rise in the validator exit queue, which ballooned from fewer than 1,000 to over 414,000 ETH.
On a more positive note, BitMine Immersion Technologies added 106,200 ETH to its staked assets on Tuesday, maintaining a substantial total of 5.078 million ETH, with 3.7 million already actively staked.
Technical Analysis: Key Levels to Observe
Market analyst Daan Crypto Trades noted that while Ethereum has been on a slow ascent over the past few weeks, it has struggled to breach the $2,400 mark. He indicated that a sustainable break above this level could propel ETH towards the ranges of $2,600 to $2,700. Meanwhile, maintaining a diagonal support line is crucial for bulls to preserve this recent uptrend.
Currently, ETH sits below its 20-day, 50-day, and 100-day EMAs, recorded at $2,287, $2,242, and $2,366 respectively. The RSI hovers around 47, suggesting a neutral to mildly bearish sentiment, while the Stochastic Oscillator has entered oversold territory.
Analyst Ali Martinez highlighted the critical nature of ETH attempting to reclaim its Realized Price, which currently stands at $2,335. Holding above this benchmark has historically led to more robust price rallies.
In the last 24 hours, ETH has faced $149.7 million in liquidations, with $110.3 million stemming from long positions. Immediate support for ETH is noted at $2,211 and subsequently at $2,107, while resistance levels are charted at $2,265, $2,280, and $2,300.
The looming question remains: will Ethereum’s price manage to hold steady above the crucial $2,220 support, or will it continue to face headwinds from the broader market dynamics influenced by decisions at the Fed?
