Ethereum Dumps: Will This Sell-Off Take ETH To $3,200?

Ethereum is sliding when writing. Even though optimism was high following the activation of Dencun, prices plunged after registering highs of around $4090. Technically, the upside remains, and the path of least resistance, if everything remains constant, remains northward.

The coin is changing hands at around $3,750 when writing and is bearish. ETH is down 5% in the past 24 hours and 4% in the previous week. Its market cap is also down 5% to over $450 billion at the current valuation. However, following the crash of March 14, the average daily trading volume is up 52% to around $3.8 billion.

Trading volume might continue spiking higher if bears press on today. However, as fear sets in, the community is ecstatic about recent developments. Top of the list are the following Ethereum news events to watch:

• Dencun Upgrade is live. With some of its EIPs, layer-2 solutions like Optimism and Arbitrum stand to benefit massively from fee reduction via Blobs. This technology makes swapping via Uniswap on Optimism more than 10X cheaper. The cheaper it is, the more users opt to trade on Ethereum, increasing demand for ETH.
• Amid the slump, more ETH is sold as large wallets book profits. In March 2024 alone, over $1.02 billion worth of the coin has been sent to exchanges. The more holders sell, the slower the march to $5,000 becomes.

Ethereum Price Analysis

ETH/USD bulls are optimistic, looking at events in the daily chart. Even though the uptrend remains, the past few days’ sell-offs are a concern.

Looking at the ETH candlestick arrangement in the daily chart, traders can look for short opportunities. This preview holds as long as prices remain below today’s highs of $3,950.

Further losses below the 20-day moving average may trigger more losses toward the March 5 lows of $3,200. 

Conversely, a sharp reversal above $3,950 at the back of high trading volume might see the coin float back towards $4,090 in a buy trend continuation formation.