Ethereum Faces Sharp Decline As ETH Targets $3,051 Support Level

Ethereum (ETH) is experiencing a significant drop, with the price fast approaching the critical support level at $3,051. This sharp drop highlights the increasing selling pressure and growing bearish sentiment in the market.

As Ethereum approaches this critical threshold, traders are closely monitoring its movement for signs of stabilization or further decline. The $3,051 support level is now in focus and could determine the short-term direction of Ethereum price movement and set the stage for future moves in the cryptocurrency market.

The purpose of this article is to analyze the sharp decline affecting the digital asset and its impact on the cryptocurrency’s price as it approaches the support level of $3,051. It also aims to provide traders and investors with a comprehensive understanding of the current situation, potential scenarios if the support level holds or breaks below, and risk management strategies in this volatile environment.

The price of ETH is currently trading at around $3,181, down 5.05% with a market cap of over $382 billion and trading volume of over $18 billion at the time of writing. Over the past 24 hours, ETH’s market cap has decreased by 5.25% and trading volume has increased by 74.43%.

Technical indicators suggest Ethereum could fall

A technical analysis of ETH’s price movement on the 4-hourly chart reveals that the crypto asset is actively bearish and trading below the 100-day Simple Moving Average (SMA). Ethereum has been consistently bearish since breaking out of the $3,360 level and is currently heading towards the $3,051 support level.

ETHUSDT. Source: Tradingview.com

Also, analysis of the 4-hour Composite Trend Oscillator reveals that the price of ETH may continue its bearish trend as both the signal line and the indicator’s SMA have fallen below the 50% level and are attempting to move into the oversold zone.

On the daily chart, the crypto asset plunged below the 100-day SMA and is attempting to drop below the bullish trend line while also declining towards the support level at $3,051.

Ethereum
ETHUSDT. Source: Tradingview.com

Finally, on the 1-day chart, the composite trend oscillator is pointing to further bearish movement for ETH as both the signal and indicator SMAs are trending in the oversold zone.

What will happen if the $3,051 support fails?

Analyzing the potential outcomes if Ethereum breaks through the $3,051 support level, we can see that if the digital asset breaks below this level, it could potentially drop to test the $2,865 support level, and if the price sinks below this level, it could possibly move to test the $2,160 support level and other levels below it.

However, if the Ethereum price is rejected at the support level at $3,051, it will start to rise towards the resistance level at $3,360. If the asset breaks through this level, it may continue its rise to test the resistance level at $3,659 and if it does break through the $3,659 level, it may proceed to test even higher levels.

Ethereum
ETH is trading at $3,165 on 1D chart | Source: ETHUSDT Trading View

Featured image from iStock, chart from Tradingview.com

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