Will Ethereum (ETH) Recover After Falling Below $3,000 Again?

• Ethereum (ETH) has dropped over 8% in the last 24 hours, from $3,100 to $2,900.
• The recent drop is partly due to Genesis Trading’s transfer of 256,775 ETH as part of its bankruptcy proceedings.

Ethereum (ETH), the second-largest cryptocurrency by market cap, has fallen below $3,000 for the second time in the past 30 days, mirroring global market concern and significant sell-off pressure in the crypto ecosystem.

Today’s 8.41% decline in ETH comes as Genesis Trading, a major player in the crypto market, has moved $521 million in Ethereum (256,775 ETH) and $1.1 billion in Bitcoin (32,256 BTC) to various addresses. This move is part of the company’s bankruptcy proceedings, which involve repaying creditors. Genesis Trading, which filed for bankruptcy in January 2023 due to mismanagement of funds linked to the Gemini Earn program, was granted court approval in May to liquidate $3 billion worth of assets to repay affected customers.

The global crypto market is already under pressure due to the Mt. Gox BTC repayments, which has led to bearish sentiment. 

Will Ethereum Climb to $3,500?

Ethereum’s price briefly recovered to around $3,150 but has since dropped below $3,000, partly due to the recent ETH transactions by Genesis Trading. The decline has also triggered significant liquidations, with $80.07 million recorded in the past 24 hours. Among these, long positions were the most affected, totaling $71.56 million.

Ethereum (ETH) Price Chart (Source: TradingView)

According to the daily price chart, Ethereum’s price is struggling below the key support level of $3,000, with recent price action suggesting a potential further decline. The 21-day simple moving average (SMA), currently above the price, might act as a resistance level of around $3,323. If ETH can bounce back from the $2,844 to $2,760 support zone, there might be a chance for a W-shaped recovery pattern.

This pattern suggests a potential market rebound after a decline, marked by two low points with a brief rally in between. If the price rises above the previous peak after the second dip, it may indicate a more sustained uptrend. But the resistance at $3,100 has proven difficult to overcome, pushing ETH further downwards.

Further, on the 4-hour chart, the rejection from the $3,500 resistance level suggests a possible larger bullish scenario. Despite this, the price has corrected nearly 30% of its recent rally and is within the Fibonacci retracement golden zone, which could indicate a potential rebound. However, with the RSI still below 50, the hinted momentum favors a continued bearish trend.

The key support levels range from $2,844 to $2,760. A bounce from this range could lead to a recovery towards the resistance levels at $3,323 and $3,550. Conversely, failing to hold these support levels may result in further declines.