Is Ethereum price about to go under $3K?

The Ether price has declined 10% since the approval of spot Ether ETFs, with open interest depreciating by over $250 million over the past 24 hours.

Ether is struggling to retain its footing in the market, as its long-term chart confirmed a major bearish signal.

ETH price dives below key trendline

ETH’s daily candle closed under the 200-day moving average (200-DMA), a move wit a history of preceding corrections.

On the contrary, spot Ether ETFs posted a net inflow of $26.7 million on Aug. 1, offering a minor glimmer of hope to the ecosystem.

Ethereum fees have plummeted since March

During the first quarter of 2024, Ethereum generated average daily fees of over $10 million, the latest onchain data shows. In March 2024, the average was as high as $15 million daily. However, since Q2, the average annualized fee has dropped to roughly $3.5 million, with July’s total revenue averaging under $3 million.

Weekly active users have been relatively stable over the past six months. Yet, the month-on-month drop in annualized fees for Ethereum is 39%.

Related: What needs to happen for Ethereum (ETH) price to reach $4K?

This has largely panned out due to the relative decline in total value locked, or TVL, for ETH since May, reflecting a drop in DeFi activity. Over $10 billion in value has been wiped out since June 7, data from DefiLlama shows.

Ether’s price support is at $2,700, but will it hold? 

Data from IntoTheBlock indicates that roughly 3.69 million addresses hold 1.24 million ETH, around $3,000. This particular price point marks Ether’s immediate and psychological support.

However, it is relatively weak compared to the critical support at $2,700. At this range, 11.11 million addresses hold a whopping 59.07 million ETH, acquired at an average of $2,647.

This level was also successfully tested as support several times in early July. Poseidon, a crypto trader, argues that this range might not hold upon another retest:

“It was a bearish retest indeed. It looks awful in the lower time frame. I don’t see any reason why we shouldn’t go below $2700. Patience.”

Chart technicals, however, show that ETH has bounced back almost immediately each time it has deviated under $3,000 over the past three months, suggesting strong demand in this area.

As observed in the chart, equal lows are formed around $2,700. Drawing confluence with the above inputs and another potential bounce at $2,650–$2,700 is certainly possible. 

Thus, it should not come as a big surprise if Ether quickly bounces from under $3,000 once again. The bidding range offers a newer dynamic and change in market structure, but more consolidation at current levels may see the ETH price undergo a reversal from its previous equal lows. 

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.