Ethereum Price Drops Below $3,000 Again Amid Mixed Market Signals

Ethereum, the second-largest cryptocurrency, saw its price fall to $2,800 on Monday, failing to maintain the $3,000 mark due to rising concerns about a possible rate hike by the Bank of Japan. Mixed signals from technical analysis and on-chain data add to the uncertainty regarding Ether’s ability to reverse the downtrend. This article explores Ether's current price range, market indicators, and sentiments influencing its trajectory.

Key Takeaways

On Monday, Ethereum's price decreased by 5.5%, slipping below the $3,000 level amid fears surrounding a potential Bank of Japan rate hike.
For a strong recovery, bulls would need to achieve a solid break above $3,200, while falling below $2,800 could negate the bullish macro trend.
Ether's MVRV Z-Score is nearing the accumulation zone, indicating a possible local price bottom is forming.

Ethereum price loses $3K again as onchain data sends mixed signals

Ethereum Price Faces Significant Resistance Levels

Ethereum's price recently experienced an 18% bounce from a low of $2,620 seen on November 21. However, this upward momentum encountered selling pressure near the psychological barrier of $3,000. Analyst That Martini Guy ₿ noted this resistance point has now shifted from being a major support level.

Related: ETH may soon reclaim $3.2K, according to low stablecoin yields: Santiment.

The significance of the $3,000 level is illustrated by the convergence of the 50-week (yellow) and 100-week (blue) moving averages. “If ETH can break above this level and maintain that position, we could see a pricing rally back into the mid-$3,000s throughout December,” That Martini Guy ₿ remarked.

ETH/USD Weekly Chart. Source: Cointelegraph/TradingView

A further area of resistance lies between $3,150 and $3,230, where around 5.1 million ETH was bought, as depicted in the Glassnode cost basis distribution heatmap.

Ethereum: Cost basis distribution heatmap. Source: Glassnode

On the lower side, the ETH/USD pair is trading above a crucial support zone near $2,800, where 3.6 million ETH were previously bought. Analyst Daan Crypto Trades highlighted that "ETH has maintained a good hold on this key support area," referring to the $2,800-$2,850 zone. He further noted that if it drops below these recent lows, it could invalidate this bullish sentiment.

ETH/USD Three-Day Chart. Source: Daan Crypto Trades

Daan Crypto Trades also mentioned that breaking above $3,350 would pave the way for ETH to approach the high range of $4,000. Cointelegraph previously reported that buyers are expected to defend the $2,800-$2,600 support range, while sellers are fortifying their position around the 20-day EMA at around $3,100.

Positive Sentiment From Ethereum ETF Inflows

The stability of Ether’s price against deeper losses is supported by recent inflows into U.S.-based Ethereum spot exchange-traded funds (ETFs). Ether ETFs witnessed $312 million in inflows during Thanksgiving week, indicating that the worst of the institutional sell-off may have passed.

US Spot Ethereum ETF Daily Net Flows. Source: SoSoValue

Meanwhile, global Ethereum ETPs recorded inflows of $309.1 million last week, demonstrating consistent demand from institutional investors. However, the ability of Ether to remain above $2,800 and reclaim the $3,000 level could be limited by a lack of network demand, as shown by decreasing Ethereum network fees, according to data from Nansen.

Blockchains Ranked By Seven-Day Fees, USD. Source: Nansen

Ethereum’s chain fees totaled $2.68 million over the last seven days, reflecting a 54% drop from the previous week. In contrast, fees on Solana increased by 2%, and Tron fees remained stable with a 0.4% rise. Meanwhile, the number of active addresses on Ethereum's base layer rose by 20%, and transaction counts increased by 4%, suggesting that this uptick in user activity could eventually enhance on-chain demand for ETH, potentially driving prices higher.

Insights on Ether’s MVRV Z-Score

Ether's MVRV Z-Score, an important on-chain metric for identifying market tops and bottoms, is close to the historical accumulation zone. This suggests that ETH may be nearing a local price bottom.

Ethereum: MVRV Z-Score. Source: Capriole Investments

The last occurrence of the MVRV Z-Score dipping to its current level around 0.30 was in June after a 25% price drop, marking a local market bottom at $2,100. This was followed by a significant rally, with ETH increasing 134% to reach its all-time high of $4,950. As previously reported by Cointelegraph, various valuation models suggest that Ethereum is currently undervalued, likely indicating ETH prices could surpass $4,000 in the near future.