For some time now, Ethereum, just like the rest of the crypto market, has been having an up and down trading period occasioned by market forces.
Despite the fluctuation of the general crypto industry, Ethereum has had its fair share of the extreme beatdowns that the market has been dishing out to other digital currencies.
The entire market achieved not much after prices fluctuated a couple of days ago due to the war in Eastern Europe.
The leading smart contract platform even managed to get to the $3,000 support level the previous week but has now lost its bearings as it’s on a downward trend. Hence, Ethereum did not attempt to establish any significant support; hence, it declined for the past couple of days.
Is Ethereum Supported?
The latest decline has seen it slide below the significant support level considering the 20 and 50-day moving averages, which are critical for establishing appreciable support and determining the bottom zone for a particular cryptocurrency.
For Ethereum, significant selling pressure is exerted on investors, leading to massive sell-offs, which has proven to be a burden on the performance of the digital asset.
One glaring thing is the absence of any brief support for Ethereum. Investors are unwilling to plunge into the purchase because this explains why the asset keeps dipping way below its 50-day average.
Another thing worthy of mention is that without any buying pressure, the supply of the asset will keep on outpacing demand, which may reduce scarcity and lead to a drastic fall in the value of the token.
Going into the next bear market in this situation placed Ethereum on a challenging path. Whenever there is bear-related pressure in the absence of any significant support, Ethereum will not be able to hold its own against any resistance, which ultimately pushes it further down.
Ethereum Visiting $2,500, A Possibility
Investors have already shown their indifference toward the $2,500 price level because it is the level that no one is ready to take a chance on, especially those who have experience trading in digital assets for a long time.
Revisiting the $2,500 level would put Ethereum way below the all-time high value it previously recorded, indicating a sharp turn in the bear trend for the token. To its credit, Ethereum has done relatively well to hold off the bears and consolidate its standing.
But the falling momentum recently led analysts to project that Ethereum may touch the $2,500 level before the token can make any recovery.
ETH/BTC price chart. Source: TradingView
The above chart indicates that ETH has fallen further below the 50-day moving average, and for any recovery to take place, there must be trading activity above $2,500. The point is the minimum that the ETH can surpass; below it means another correction for the asset.
Moving into a transaction period where there is no support, the next support level, set at $2,522, will not be enough for Ethereum to break even, thus making it vulnerable.