Ethereum Price Faces Rejection at $3,400, Indicating a Potential Correction Ahead

Ethereum's price has faced significant resistance at the 200-day moving average near $3,400, leading to a heightened chance of a deeper correction towards the $2,500 support area. With current market sentiment remaining uncertain and the price compressing below the moving average, traders should brace for potential downward movement unless critical levels are reclaimed.

Key Takeaways

Ethereum's price has been rejected twice at the 200 MA around $3,400, indicating strong resistance.
The likelihood of a deeper correction towards the $2,500 support zone has increased.
The next significant resistance level above is at $3,580, while the key support level is at $2,500.
A bearish trend is evident, characterized by lower highs and lower lows.
Recent volume dynamics suggest that bearish pressure remains strong.

Ethereum price rejects from 200 MA, increasing probability of a further correction

Analysis of Ethereum's Price Behavior

Ethereum price rejects the 200 MA at $3,400, suggesting a deeper correction to unfold - 1
ETHUSDT (1D) Chart, Source: TradingView

Ethereum has shown persistent weakness after experiencing a rejection at the 200-day moving average near $3,400 on two occasions. This refusal at the moving average indicates a robust resistance level and has shifted the price trajectory back downward. Such dynamic resistance often points to underlying weakness in the market, and these repeated failures suggest a lack of bullish momentum to regain upward trends.

Sitting just above the 200-day moving average is the next significant resistance level at $3,580, which coincides with the 0.618 Fibonacci retracement. This area is crucial, as traders commonly anticipate a lower high to form here. As Ethereum remains enmeshed in a larger bearish trend marked by consistent lower highs and lower lows, this resistance zone could act as a crucial turning point unless the price manages to break clearly above $3,580.

On the opposite end, the key support level to watch is at $2,500. This level is also connected to the Value Area Low (VAL) of the current market profile, highlighting its potential importance as a target if weakness persists.

The influence of the 200-day moving average is becoming more pronounced. As long as the price remains under this key level, sellers are firmly in control, and attempts from buyers to break out lack the necessary strength. This situation often precedes increased volatility in the downward direction, especially when the overall market sentiment leans bearish.

Moreover, the broader chart for Ethereum still shows a macro downtrend, with rallies consistently resulting in lower highs. These failed attempts at gains often signal exhaustion rather than the buildup of buying activity.

If the recent rejection at $3,400 serves as another lower high in the broader context, it could set Ethereum up for a deeper decline towards $2,500 or even lower. This sentiment is further supported by recent outflows from Ethereum ETFs totaling $75.21 million, without corresponding inflows, as prices hover around $3,000, indicating a waning interest among investors.

The dynamics of trading volume also reinforce this bearish outlook. Efforts to surpass the 200-day moving average have been accompanied by dwindling bullish volume, while sell-side activity appears increasingly forceful. This imbalance solidifies the expectation that ongoing price declines are more likely than a swift reversal.

Future Price Expectations

Ethereum is expected to continue trading within a range between $3,580 and $2,500, with bearish pressure likely dominating as long as the price remains beneath the 200 MA. A deeper correction towards the $2,500 Value Area Low seems increasingly plausible unless buyers can reclaim and close above the critical 200-day moving average with substantial volume.