Ether on $2815 support line, downside risk remains high
The second-largest cryptocurrency, Ethereum, got the second week of July off to a positive start. Ether’s price found appropriate support at $2815—a multi-month horizontal level intact in February 2024—in the aftermath of the recent market selloff.
This support is critical for Ether to lead another correction or bounce back, as it nearly aligns with the 23.6% Fibonacci retracement. If the price recaptured the immediate resistance of the 200-day Exponential Moving Average around $3080, then ETH buyers could receive a stronger confirmation of a positive reversal.
The Relative Strength Index turned back from the oversold area, indicating that the excessive selling has caused a price cooldown that will allow selling to pick up steam. Conversely, the daily chart of the price of Ethereum displays a double-top formation. Extended correction remains possible with this reversal pattern. The pressure might increase and drop to the $2.5K level in the event of a breakdown from the $2815 support line.
The Relative Strength Index (RSI) is below the neutral level of zero and fifty. The indicator needs to move above these crucial levels for bulls to maintain momentum and assist the current recovery advance. Furthermore, if the altcoin closes above $3,240, it may increase 5.5% to retest its previous daily high, set on June 9 at $3,717.
Strong fundamentals point to a likely price bounce soon, even if the spot Ethereum exchange-traded fund (ETF) launch in the US takes longer than anticipated. Before the end of September, or “sometime in the summer,” according to US Securities and Exchange Commission Chair Gary Gensler, approvals for S-1 filings are anticipated. However, the precise timetable is still unknown, so traders have good cause to stay cautious.
Since comparable spot Bitcoin ETFs have experienced $654 million in inflows over the last three days, anticipation for the eventual debut is growing. In the first eighteen months of trade, spot Ethereum ETFs might draw in as much as $15 billion, according to Bitwise’s Chief Investment Officer, Matt Hougan.
Ethereum’s layer-2 solutions have been helpful to investors looking for lower costs; within the past month, these solutions have witnessed a considerable increase in activity.
Ethereum DApps recorded a volume of $200.9 billion over the last 30 days, but its layer-2 ecosystem grew dramatically. For instance, Arbitrum had a 94% increase in volumes to $52.4 billion, while Blast and Base saw 62% and 57% growth, respectively, to $51.1 billion and $18.4 billion. Conversely, direct competitors such as BNB Chain and Solana saw an average loss of 27%.