Ethereum continues to slide further away from the $4,000 mark. Recent profit-taking and cautious sentiment are weighing on the market's growth momentum, leading to a significant drop in ETH's price from the peak of $3,941 in July. Technical indicators and on-chain data currently suggest an increasing likelihood of prices dropping below $3,000 in the coming weeks.
ETH Faces Obstacles as Accumulation Decreases and Bearish Signals Increase
Glassnode data shows that the accumulation ratio of Ethereum holders closed at a two-month low of 27.57% on Saturday, a sign that investors are no longer actively buying more ETH.
According to the on-chain data provider, this metric measures the percentage of addresses that have increased their ETH balance against addresses that have decreased or maintained their balance.
When prices rise, it indicates accumulation behavior - commonly seen during bullish phases when confidence in future price increases is high.
On the other hand, the declining ratio, as it stands, signals weakening confidence and hesitation to buy as prices fall. With fewer holders, ETH lacks the buying pressure often required to sustain a recovery.
Furthermore, the ETH Elder-Ray Index has shown red chart bars in the last three trading sessions, confirming that the bears have dominated the bulls. At the time of writing, this index stands at -342.73.
This indicator measures the strength of buyers and sellers in the market. When the indicator displays green chart bars, it indicates strong dominance of buyers and increasing bullish momentum.
Similarly to ETH, the downward momentum increases when red bars appear with sizes continuing to expand. These red bars indicate that selling pressure is not only present but also increasing over time.
ETH Heads Towards $2,745 as Buyers Withdraw
ETH is currently trading at $3,457, just below the critical resistance level formed at $3,524. If accumulation weakens, the downward momentum could pull prices down to the next key support level at $3,067. If this support level is broken, ETH could slide further to test the $2,745 region.
Conversely, a new wave of demand could shift market sentiment and drive a recovery. In that case, ETH may attempt to break through the resistance level of $3,524. A successful breakout could pave the way for an extended rally towards $3,859.