Ethereum Price Faces Downtrend, Eyes $2,900 Support Level

Ethereum's price continues to exhibit weakness amid an expanding bearish market structure. Currently, attention is on the $2,900 support level, which could trigger a capitulation event.

Key Takeaways:

Current Price Action: Ethereum is facing continued weakness, with a focus on the $2,900 support level.
Bearish Trend: The cryptocurrency has been under selling pressure since losing $3,900 and showing lower highs.
Critical Resistance: The $3,400 resistance has blocked recovery attempts; hence, a bearish sentiment persists.
Future Outlook: The $2,900 level may dictate significant future price action, whether it leads to a capitulation drop or a potential relief rally.

Ethereum Price Tracking Downtrend

Ethereum (ETH) has been under persistent selling pressure since dropping below the $3,900 mark, initiating a prolonged bearish trend. Now, the cryptocurrency approaches the high-timeframe support at $2,900, a zone that has not been tested yet during this downtrend. The lack of bullish strength and the absence of recovery momentum raise alarms that ETH may experience a more significant correction before any meaningful upward movement can occur.

Key Technical Indicators for Ethereum's Price

Ethereum Price Chart
ETHUSDT (6H) Chart, Source: TradingView

Ethereum's price movements clearly indicate the continuation of its bearish trend, which began after failing to reclaim the $3,900 level. Since that point, ETH has consistently formed lower highs, maintaining downward pressure, suggesting that the $2,900 area is likely to come into play soon.

This $2,900 level is crucial as it may serve as a liquidity zone, where a price bounce or accumulation phase could start, and it also stands as a potential support area that could lead to a capitulation-style drop.

Resistance at the $3,400 level has proven to be strong, blocking several attempts at price recovery over the past weeks. Until this resistance is successfully reclaimed on a closing basis, bearish market conditions are expected to continue.

The trading range between $3,400 resistance and $2,900 support now outlines the broader environment for Ethereum, with limited indications of directional conviction in the immediate term. Volume profiles also point to diminishing buyer participation. Even with minor relief bounces, there hasn't been a significant influx of bullish momentum, indicating a lack of demand that reinforces the bearish outlook. This absence of volume confirmation suggests that ETH may need to sweep liquidity below the current levels before a sustainable reversal can take place.

What to Expect in the Near Future

Should Ethereum decisively break below the $2,900 mark, a capitulation event could accelerate, driving prices toward deeper support zones. This scenario could also reset the market structure for a long-term base. On the other hand, if the $2,900 level holds and trading volume picks up, a short-term relief rally towards $3,400 could emerge.

For now, the market remains technically bearish, making $2,900 a crucial level that could determine Ethereum's next significant price movement.