Ethereum price returned to the upside on Monday, gaining 1.6% at the time of writing to trade at $3,332. The crypto coin has struggled for traction in the last seven days, with its value down by 15.3% during that time. However, a return above the $3,300 mark, a support level for the last month, signifies a potential resurgence in the coming days.
The crypto market’s second-largest asset has been tracking Bitcoin price closely in recent weeks, affirmed by a correlation coefficient of 0.75. Therefore, its current slump is attributed to BTC’s decline from record highs of $108,364 to five figures. Also, Ethereum’s wide ecosystem across DeFi and dApps has experienced a decline in performance in recent days.
Ethereum chain is the largest DeFi ecosystem, accounting for more than 57% of the Total Value Locked (TVL). However, it recorded a 13% slump in the last seven days, with the TVL at $66.56 billion as of this writing. That denotes reduced utility and demand, which has brought downward pressure on Ethereum price.
Meanwhile, IntoTheBlock reports that ETH’s total exchange netflows rose from -$725.3 million to $45.5 between December 17 and today. That shows that investors are increasingly transferring their ETH coins from their wallets to exchanges, which infers rising prospects of more ETH selling. That, too adds downside pressure on Ethereum price.
Ethereum price pivots at $3,315, with the buyers in control as signaled by the RSI indicator. That will likely see the first resistance coming at $3,360. A stronger upside momentum will break above that barrier and could potentially send the price to the second resistance at $3,400.
On the other hand, moving below $3,315 will favour the sellers to take control. In that case, ETHUSD will likely find initial support at $3,280. Breaking below that level will invalidate the upside narrative. Also, the resulting momentum could extend the decline and test $3,248.
This post was last modified on Dec 23, 2024, 11:58 GMT 11:58