The Ethereum market has seen a significant increase in activity on July 8th, with its price breaking through the important 100-day Moving Average (MA) support line, followed by a rapid decline towards the 200-day MA. This change not only reflects market sentiment fluctuations but also indicates short-term adjustment pressure.
Technical Analysis Insights
According to the daily chart, Ethereum has been consolidating around the key 100-day MA at $3386 for a long time, with selling pressure gradually increasing, eventually leading to a breach of this moving average. This breakthrough triggered panic selling in the market, pushing the price rapidly towards the 200-day MA at $3096 and ultimately breaking through that level. This series of actions clearly outlines a bearish trend in the market, but it is worth noting that Ethereum is currently near the key support area of $3000, suggesting a possible short to medium-term consolidation correction period.
Further observation on the 4-hour chart reveals that Ethereum, after experiencing a long period of sideways movement near the support level of $3386, suddenly faced intense selling pressure, resulting in a break of this important support. The subsequent price movement shows a clear downward impulse, indicating that the long-term selling pressure accumulated within the market is being released. However, the strong support at the $3000 region appears to be slowing down this decline, and the RSI indicator has dipped below 30, suggesting an imminent short-term breathing opportunity in the market.
Emotional Analysis Reveals Market Psychology
Behind the recent selling pressure on Ethereum, there is a significant liquidity pool below $3000, where a large number of stop-loss orders set by aggressive long positions are clustered. The existence of these stop-loss orders makes this area a sensitive point for market sentiment. Once the price falls below this support, it may trigger massive stop-loss selling, further intensifying the bearish sentiment in the market. Therefore, traders need to closely monitor the dynamics of the $3000 support area to grasp the upcoming changes in market trends.
Furthermore, investors are advised to pay attention to potential liquidation zones in the market, which often indicate an imminent significant market reversal. By identifying and understanding these areas, investors can more accurately formulate investment strategies and seize market opportunities.
Due to the drop in value since July 6th, most trades have ended with sales. If this situation continues, the price of ETH is likely to fall below $3000. Additionally, if buying pressure fails to match the increase, the price could drop to $2881 as seen on the 5th.
In addition to the above content, the actual market value is consistent with forecasts. The actual market value represents the ratio of the last movement value of each token to its trading value.
As a measure of the total cost basis, the single-day realized market value has dropped to $5.5945 billion. This decrease implies that some holders of ETH have incurred unrealized losses.
If this situation continues, the broader market may lose confidence in Ethereum, potentially leading to a decrease in demand for cryptocurrencies. If this happens, the price could fall as mentioned earlier.