Important points
- ETH has fallen 1% in the past 24 hours and is currently trading below $3,200.
- If the daily candlestick closes above $3,100, the coin could rise above $3,500.
Market takes a breather, ETH approaches $3,200
The crypto market has been extremely bearish since the beginning of this month, with Bitcoin losing important psychological ground. Bitcoin fell to a six-month low of $93,000 on Sunday, and altcoins also posted huge losses.
Ether, the second-largest cryptocurrency by market capitalization, is trading below $3,200 after retesting the $3,000 support level over the weekend. The coin has lost 11% of its value over the past seven days, meaning the second-largest cryptocurrency by market capitalization has posted losses for the third consecutive week.
Ether’s weak performance is in line with the broader crypto market as liquidity tightening measures by the Federal Reserve impact risk-based assets. However, analysts are confident that the crypto market will turn things around in the short term.
Derek Lim, head of research at Caladan, told The Block:
In my opinion, the main driver of the market remains liquidity. Liquidity has temporarily tightened (and will continue to tighten) as the Treasury’s general account remains elevated due to the U.S. government shutdown.
Ether’s performance in the coming days may depend on whether it continues to defend the $3,000 psychological and support level.
Ethereum could recover if $3,000 support level holds
The ETH/USD daily chart is bearish and efficient as Ether has underperformed for the past 7 days. The coin faced rejection last week at its previous break trend line near $3,592 and has since lost 12% of its value. At the time of writing, ETH is trading at $3,192 per coin.
If the support level at $3,017 holds, Ether could continue its recovery and rally towards the key resistance level at $3,592. Similar to Bitcoin, Ether’s RSI has also rebounded from oversold territory, indicating that bearish momentum is fading.
Conversely, if Ether’s daily candlestick closes below $3,017, it could register further bearish performance and cause it to fall towards the next key support at $2,749.
