Ethereum, the world’s second-largest cryptocurrency, has seen its recent rally come to a screeching halt as Ethereum (ETH) has erased all of its gains in the wake of the highly anticipated Shanghai upgrade.
While many had high hopes for this upgrade, which promised to improve the network’s speed and scalability, the market seems to have reacted negatively to the news.
This sudden drop in price has left investors wondering what the future holds for Ethereum, and whether or not it can recover from this setback.
Crypto Market Downturn Drags Ethereum Lower
At the time of writing, the price of Ethereum stands at $1,860.72 according to CoinMarketCap, but the past 24 hours have not been kind to the cryptocurrency, as it has seen a slump of 4.05%.
The past week has been even more unforgiving, with Ethereum experiencing a significant drop of 11.02%. The once high-flying cryptocurrency is now left to wonder what caused this downturn and whether it can regain its vigor in the days and weeks ahead.
In recent days, the cryptocurrency markets have been displaying signs of fragility, largely due to anxieties about persistently high inflation, fluctuations in the stock market, and the looming threat of an economic recession, which have all contributed to dragging prices downward.
Against this backdrop, Ethereum has been experiencing a steady decline since Tuesday, a trend that has been mirrored in the wider cryptocurrency market.
Bitcoin, for instance, has suffered a drop of over 3% in the past 24 hours alone and has fallen by more than 10% from its recent peak above $30,000, currently trading at just around $27,346.
ETH False Breakout Of Local Support Level: Potential Bounce-Back?
Despite a recent fall, the price of ETH experienced a false breakout of the local support level at $1,896. However, a daily closure far from the $1,900 mark may trigger a bounce back toward the $1,920-$1,930 zone tomorrow.
Ethereum (ETH) market cap at $223 billion on the daily chart at TradingView.com
On a larger time frame, the situation for Ethereum remains bearish, with the bar on the verge of closing below yesterday’s low at $1,913.60. If this happens, there is a high likelihood of further decline towards the next significant support level at $1,846, a scenario that may play out until the end of the week.
Looking ahead from a midterm perspective, Ethereum’s price has retreated to the middle of a wide channel, with sellers taking control as the price remains below the crucial $2,000 mark.
This indicates that the cryptocurrency may face continued pressure and struggle to regain its bullish momentum.
-Featured image from Zohr