Ethereum (ETH) price fell below its 20-day exponential moving average (EMA) and 50-day simple moving average (SMA) on October 1st. Since then, it has struggled to break out of these levels, which have served as resistance points.
The inability to overcome these resistance levels suggests potential reluctance on the part of buyers to enter the market at higher prices.
Ethereum struggles below resistance
Ethereum is currently trading at $2,398, slightly below its 20-day exponential moving average (EMA) of $2,462 and 50-day simple moving average (SMA) of $2,483. The 20-day EMA reflects the average closing price over the past 20 days, while the 50-day SMA provides a longer-term perspective by tracking the average closing price of an asset over the past 50 days.
When an asset’s price falls below these moving averages, it usually indicates a downtrend or loss of upward momentum. In this case, these moving averages act as resistance levels, making it difficult for Ethereum to move higher unless demand increases significantly.
Read more: How can I invest in Ethereum ETFs?
Ethereum 20-day EMA/50-day SMA. Source: TradingView
There is no such demand in the Ethereum market, as evidenced by the negative Chaikin money flow. The indicator, which measures the flow of funds into and out of the coin market, is trending downward and is below the zero line at -0.08.
If an asset’s CMF is negative, it indicates that there is more selling pressure than buying pressure. This reflects bearish sentiment among traders and investors and suggests an extended decline.
Ethereum Chaikin money flow. Source: TradingView
Ethereum price prediction: prepare for further decline
Ethereum’s Parabolic Stop and Reverse (SAR) indicator evaluated on the 1-day chart confirms a bearish bias against the major altcoins. Since October 1, the points that make up this indicator have been higher than the price of Ethereum, suggesting that Ethereum is trending downward. Traders often interpret this as a signal to sell or close a long position.
If the selling pressure continues to gain momentum, Ethereum price could move further away from the 20-day EMA and 50-day SMA, reinforcing the downtrend. In this scenario, the price could drop to $2,062.
Read more: Ethereum (ETH) Price Prediction 2024/2025/2030
Ethereum price analysis. Source: TradingView
However, if buying pressure increases, this bearish outlook could be reversed. If this happens, Ethereum price could break through the resistance established by the 20-day EMA and 50-day SMA and trade at $2,836.
Disclaimer
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