Ethereum Slips Below $2,400 – What Could Trigger a Recovery in ETH? - Forex News by FX Leaders

Ethereum Slips Below $2,400 – What Could Trigger a Recovery in ETH?

Posted Tuesday, January 25, 2022 by
Arslan Butt • 2 min read

The ETH/USD pair closed at $2,534.41, after reaching a high of $2,547.01, and a low of $2,373.75. On Sunday, ETH/USD found some support and broke its bearish streak of the previous six days, on the back of some positive developments. The world’s second-largest blockchain network by market capitalization, Ethereum, gained some traction in the market after a Coinbase analyst expressed an optimistic view of ETH. Ethereum and its competitors have been facing heavy selling pressures for the past few weeks, amid the increased popularity of so-called Ethereum-killers.

Ethereum Live Rate

 

ETH/USD

A large number of competitors were encouraged to enter the market and weigh in on the Ethereum blockchain, due to its high popularity and high transaction fees. Layer-1 blockchain alternatives, such as Solana, Cardano and Binance Smart Chain, have lower costs, faster speeds, and higher throughputs than Ethereum. The growing number of competitors and the lack of a confirmed date for the upcoming Ethereum 2.0 launch weighed on the ETH/USD prices over the weekend. According to an analyst at Coinbase Institutional, the only real ETH killer might end up being Ethereum 2.0. He stated that switching from a proof-of-work mechanism to a proof-of-stake mechanism will help ETH maintain its position and reduce the threats posed by its competitors. These comments by a Coinbase analyst pushed the ETH/USD prices higher over the weekend.

On Saturday, Ethereum dropped to its lowest price in six months. However, it was still nearly twice as valuable as it was a year ago. On Sunday, the prices moved in the opposite direction, recovering some of the previous session’s losses, amid the price correction. There was no such significant factor to support the Ethereum prices, as investors began booking profits at its 6-month low.

Furthermore, the declining price of the US dollar also added further upward momentum to the ETH/USD prices, as the two have a negative correlation. US dollar investors were also cautious ahead of the FOMC policy meeting, to be held next week on Wednesday and Thursday. The central bank of the United States is expected to announce some sort of timeline for the upcoming rate hike this year. Ahead of that, the market remained subdued, and the dollar dropped.

Ethereum (ETH/USD) – A Technical Outlook

On the technical front, the ETH/USD is trading with a strong selling bias, having plunged to 2,388. It is gaining immediate support at 2,300; however, the recent formation of candles suggests chances of a continued downtrend.

Daily Technical Levels

Support               Resistance
2,277.39              2,584.50
2,142.29              2,756.51
1,970.28              2,891.61
Pivot Point:        2,449.40

A break below 2,300 would expose Ethereum to levels of 2,140 and 1,735. At the same time, the resistance continues to hold at 2,550. A surge in demand could lead the ETH/USD prices towards the next resistance levels of 2,750 and 2,890.

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