Is Ethereum Headed for a Breakdown? Key Levels to Watch Below $2,400

Another slip in Ethereum price warns of the local support trendline crackdown. Will the altcoin survive?

The Ethereum price currently trades at $2,418, with a 24-hour drop of 2.85%. In the past seven days, it has dropped by 8.56% and lost the $300 billion market cap threshold. Ethereum’s valuation now stands at $291 billion, with a 24-hour trading volume of $16.11 trillion. 

Can Ethereum maintain its position above $2,400 as selling pressure resurfaces amid increased market volatility? Let’s examine the key support levels and potential price trends.

Ethereum Price Analysis

The daily chart indicates a larger falling channel pattern, signaling an ongoing downtrend. Additionally, the bullish momentum within the bearish channel is struggling to gain traction due to the significant supply at the 50-day EMA.

Following the recent market correction, ETH’s price has decreased from a 14-day high of $2,729 to its current level, representing an 11.52% drop. However, bullish sentiment remains intact as long as the price stays above the crucial support level of $2,350.

On the 4-hour chart, there is an increasing likelihood of a breakdown rally.

The bullish resistance in this timeframe has led to another pullback. With rising selling pressure, the ETH price is approaching the local support trendline near the $2,350 mark.

Moreover, the MACD indicator on the 4-hour chart shows a bearish crossover. The 50, 100, and 200 EMA have also given bearish crossovers, aligning with a downward trend.

Consequently, technical indicators on the 4-hour chart signal a sell opportunity. If a bearish breakdown occurs, the next significant support levels for ETH are $2,150, the psychological $2,000 mark, and the $1,900 support level.

Analyst Highlights Crucial On-chain Support at $2,300

According to the Global In and Out of Money Indicator from IntoTheBlock, 77.54% of Ethereum’s current supply is “in the money,” amounting to approximately 105.62 million ETH tokens, valued at $255.43 billion.

The “At the Money” range currently spans from $2,412 to $2,511, encompassing 6.66 million ETH, or 4.85% of the current supply, valued at $15.97 billion. Meanwhile, 23.99 million ETH tokens, worth $58.02 billion, are classified as “out of the money,” accounting for 17.61% of the total supply.

Analyst Ali Martinez noted the importance of this profitability indicator, emphasizing that Ethereum’s crucial support level is approximately $2,300, as nearly 2.77 million addresses hold 52.65 million ETH tokens.

Ethereum Option Open Interest Exceeds $5B

As Ethereum’s price approaches the $2,400 threshold, the open interest in Ethereum has dropped by 1.02%, now standing at $11.44 billion. The options market reflects volatility, highlighted by a 28.50% surge in options volume, amounting to $46.465 million.

Data from CoinGlass indicates that open interest in Ethereum options has increased by 2.44%, reaching $5.07 billion.

The long-to-short ratio over the past 24 hours is at 0.96, indicating a mildly bearish sentiment. However, top traders on Binance show strong bullish expectations for Ethereum, with a long-to-short account ratio of 3.48 and a position ratio of 2.12.

In the past 24 hours, the market has liquidated $51.23 million in Ethereum positions, with $43.17 million of long positions liquidated compared to $8.05 million in short positions.

With over five times more long positions liquidated than short positions, the overall sentiment for Ethereum’s price trend remains bearish. In this environment, Ethereum is likely to test crucial support levels around $2,350, $2,300, or $2,150 if broader market sell-offs continue.