Ethereum Price Crash: Will ETH Plummet to $2,000 Amid 2024’s First Death Cross?

Ethereum, the second-largest cryptocurrency by market capitalization, is on the brink of a significant downturn as technical indicators signal potential trouble ahead. After a brief surge, Ethereum’s price is facing mounting pressure, with analysts warning of a possible 22% drop that could push the cryptocurrency below the $2,000 mark.

Ethereum’s Bullish Momentum Fades

Starting the week on a high note, Ethereum saw a 4% increase to $2,520 during Monday’s U.S. trading session. This uptick sparked optimism among investors, especially as Bitcoin struggled to reclaim the $60,000 threshold. However, the rally was short-lived, and Ethereum’s bullish momentum quickly began to falter. The cryptocurrency’s recent performance suggests that the initial excitement was a temporary relief, with bearish forces gaining strength.

Death Cross Formation Signals Trouble for Ethereum

The decline in Ethereum’s price over the past week has been alarming, with the cryptocurrency falling from $2,820 to $2,400—a 14.9% loss. This drop has brought Ethereum below the critical support level of $2,800, which had held firm for the past five months. The shift in market sentiment from buying on dips to selling on rallies is evident, as Ethereum now trades below all major daily Exponential Moving Averages (20, 50, 100, and 200 days).

A particularly concerning development is the formation of a “death cross,” where the 100-day EMA crosses below the 200-day EMA. This is the first time in ten months that such a bearish signal has appeared, and it could significantly increase selling pressure. If this trend continues, Ethereum’s price could fall by as much as 22%, testing the ascending trendline that has provided dynamic support since June 2022. A breakdown below this level would likely trigger a prolonged correction.

Rising Exchange Supply Adds to Downside Risk

Adding to Ethereum’s woes is the increasing supply of ETH on exchanges. According to data from Santiment, the amount of Ethereum held on exchanges has been steadily rising since January 2024, reaching approximately 20.9 million ETH. Historically, an increase in exchange supply correlates with downward pressure on prices, as investors position themselves to sell in anticipation of further declines.

The current situation presents a critical juncture for Ethereum holders. A successful retest of the long-standing support trendline could reignite a recovery, but the prevailing trend, as indicated by the Average Directional Index (ADX) at 32%, suggests that the market could continue to favor the bears.

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