Ethereum in Red Zone As Bulls Retreat: Is $2,000 a Distant Dream for ETH Price?

As Ethereum (ETH) battles stormy seas in the crypto market, a bleak cloud hangs over its bullish forecast. The second-largest cryptocurrency recently saw its price plummet dramatically below $1,900, shaking the faith of even the most ardent supporters. The recent Federal Open Market Committee (FOMC) meeting, hinting at possible interest rate hikes, is a key factor driving Ethereum’s steep decline. This, coupled with Ethereum’s bearish network activity, makes the $2,000 goal seem increasingly distant.

Ethereum’s TVL Continues To Decline

The Ethereum network appears to be struggling with distinct hurdles, emphasized by co-founder Vitalik Buterin’s admission on June 29 about not staking his entire Ether due to the intricacies of multi signature wallets.

The Total Value Locked (TVL) – a metric that quantifies deposits held in Ethereum’s smart contracts – has plummeted to its lowest since August 2020. In this month, the TVL experienced a 3% dip, amounting to just 13.6 million Ether, as reported by DefiLlama.

A diminished TVL may indicate that investors are either losing faith in the utility of the network’s smart contracts or are migrating to layer-2 options for lower transaction expenses. Both scenarios imply a damaging impact on the potential demand for the Ethereum network, a factor currently viewed with a bearish perspective.

On the other hand, bulls are still attempting to hold ETH price as the asset experiences a surge in bullish developments. On-chain analytics firm Santiment reports that Ethereum’s network growth, measured by the creation of new addresses, is at its highest level in four months.

The Ethereum network has been expanding recently, indicating a faster rate of new address creation. However, reaching the $2K mark might take a month for ETH price amid bearish macro events.  

Will ETH Price Drop To $1,700?

Ethereum has recently declined from its $2,000 resistance point, signifying active bearish control at this level. The price further accelerated its bearish rally and broke below $1.9K, bringing a spike in selling pressure. 

For further consolidation between $2,000 and $1,600, the bears would need to keep the price beneath the moving averages. As of writing, ETH price trades at $1,870, declining over 0.8% in the last 24 hours.

If bears successfully push the price below 23.6% Fib channel at $1,821, it will gain momentum for a trend toward the bottom level of $1,761. Bears will likely consolidate the price further to eliminate the hope of reaching $2K.

On the other hand, a rebound off the $1,760 could suggest a shift towards a positive sentiment with traders buying into the dips, improving the chances of breaching the $2,000 mark. This could potentially send the ETH price toward the $2,180 level.