The Ethereum price is constantly forming lower highs and lows, displaying the growing strength of the bears as market dynamics have lost their stability. Along with Bitcoin prices, Ethereum prices have also been slashed to some extent, while the bulls are trying hard to defend the lower support. Now that the trend has flipped in bearish favour, it could be interesting to watch whether the price will knock back below $3000 or sustain above the levels.
The second-largest token has always bounced back from under $3000 in recent months, which indicates a strong demand. However, the current trade set-up suggests another visit below the levels, as the current candle is closing below the crucial 200-day MA. Hence, it suggests the price could be susceptible to another reversal, which may compel the token to enter the bidding range.
Currently, the ETH price is holding onto the crucial area of support and if this is lost, an extended bearish pullback may validate a final big correction.
The ETH price has dropped by over 10% since the launch of the spot ETF, with a drop in the open interest of $250 million in the past few hours. Moreover, if the price fails to restore levels above the 200-day MA, it may signal the possibility of a correction. The price is testing the lower support at $3,160 and a breakdown appears to be imminent. Hence a pullback below $3000 could cause a drop between the range of $2902 and $2867.
Besides, the Ethereum fees have dropped significantly since March, from an average of $10 million to $3 million. Moreover, Ethereum’s TVL has also dropped remarkably since May, reflecting decreasing DeFi activity. Besides, the area around $3000 can be considered a crucial support zone, as nearly 1.24 million addresses have been held over 3.69 million addresses. However, the critical support lies around $2700, with 11.11 million addresses holding 59.07 million ETH tokens, which appears stronger.
Therefore, a rebound from $2650 to $2700 could be more probable, holding the possibility of another reversal in the next few days.