Will Ethereum's Price Rebound or Experience a Further Drop? Key Insights for Investors

Ethereum's price has encountered significant downward pressure recently, dropping below the $3,000 mark and delving deeper into previously established secondary support levels. Current technical analyses reveal a crucial leverage point that will dictate whether Ethereum can recover or if it is poised for another decline.

Key Takeaways

Ethereum recently fell below $3,000 and is testing deeper support levels.
The critical leverage zone for Ethereum's price is identified between $2,830 and $2,835.
A rebound occurred from $2,680, but risks remain if the price falls below $2,770.
Current trading conditions show Ethereum at $2,908, just above the leverage point.

Ethereum

Identifying the Key Leverage Zone: $2,830 to $2,835

In November, Ethereum's price plummeted to a demand zone near $2,680 on November 21, prompting buyers to drive a 10% rebound, bringing the price back up to around $2,970. A significant development occurred as the downward RSI (Relative Strength Index) trendline was reclaimed, indicating a potential shift in momentum.

Despite this bounce, Ethereum has not completely evaded danger. According to crypto analyst Umair Crypto on social media platform X, the most notable aspect of the analysis is not just the recent bounce, but rather the location of substantial orders from whale investors.

A substantial number of ETH blocks, approximately 4,000 to 5,000, were traded in the range between $2,830 and $2,835, establishing this narrow range as a crucial leverage point for the market.

Ethereum
Source: Chart from Umair Crypto on X

As long as Ethereum remains above the $2,835 mark, those whale investors are profitable. The psychological effect of this situation is significant since major players typically do not exit positions that are above their entry points. This explains the price's consistent reactions around this critical level, and as long as Ethereum maintains its position here, there is potential for a rebound. Increased momentum can arise as short sellers exit and sidelined buyers enter in response to increased trading volume and RSI metrics.

Important Levels to Watch: Breakdown Below $2,770

Should Ethereum fail to remain above the crucial leverage zone of $2,830 to $2,835, it will face another critical support point at $2,770. A closure below this level would endanger the whales who previously aided in the recovery, likely pushing their investments below profitability, which could force them to sell their holdings.

This support zone is evident on short-term charts, marked by clusters of red circles at lower price points. A decline below $2,770 would expose Ethereum to further downward risk, potentially sending it back to its lowest trading levels since June.

As of now, Ethereum is trading at $2,908, reflecting a minor increase of 1.5% in the last 24 hours, hovering just above the critical leverage range of $2,830 to $2,835.

Ethereum
ETH trading at $2,915 on the 1D chart | Source: ETHUSDT on Tradingview.com