Amid the ongoing bearish market sentiment, the world’s second-largest cryptocurrency Ethereum (ETH) has been severely affected, with its price dropping by a massive 7%. With this sharp drop, ETH has now fallen below its 200 exponential moving average (EMA), indicating that it has entered a downtrend.
ETH below 200 EMA
The 200 EMA is a technical indicator that indicates both uptrends and downtrends in any asset. If an asset is above the 200 EMA on a longer timeframe, it indicates that the asset is in an uptrend. Conversely, if it is below the 200 EMA, it indicates a downtrend.
This is the second time ETH has fallen below the 200 EMA since November 2023. Previously, on July 4, 2024, ETH fell below the 200 EMA for the first time during this period and stayed there for nearly six trading days. However, less than a month later, ETH fell below this key indicator again, foreshadowing a downtrend.
Traders liquidated $76.4 million worth of ETH positions
According to data from on-chain analytics firm CoinGlass, traders and investors liquidated $76.4 million worth of long and short positions during this downtrend. The main liquidations came from buyers, who liquidated $63.16 million of long positions. Shorts, on the other hand, only experienced $13.24 million in liquidations.
At press time, ETH is trading near $3,020, with a 2.7% price drop over the past 24 hours. During the same period, it also hit a low of $2,988, according to Coinmarketcap data. Meanwhile, trading volumes remain stable, indicating that investor and trader participation has not changed.
Ethereum Technical Analysis and Upcoming Levels
According to expert technical analysis, Ethereum is looking bearish as it recently broke below the critical support level of $3,150. With this drop, there are high chances that ETH could drop another 5% and hit the $2,880 level, which is another key support level.
Given this bearish outlook, ETH’s open interest (OI) has also fallen by 2.5%. The decline in OI indicates a drop in interest from investors and traders. However, as prices continue to fall, some investors appear to be selling their holdings while others appear to be buying.
