ETH Early Weakness Signs Propel Macro Weakness Trend

ETH Early weakness signs only mean that the asset was inching lower from the breaking support level point to the bottom of the long-held trading range as we are reading more in the Ethereum price analysis.

The drop has come about despite bitcoin showing great signs of stability in the $9000 region. ETH is now trading in a crucial support level that the buyers are trying to defend as the break below could be dire. Analysts noted that for the first time, ETH is showing signs of a macro weakness which could mean more downside is incoming. Ethereum was generating massive on-chain activity and the metrics detailed the usage and surged at the same time to all-time highs which means the cryptocurrency is fundamentally robust.

eth chart
Image By Cactus (Source: Tradingview)

That being said, this was not enough to invalidate the technical weakness that we saw in the recent times. The divergence between the fundamental strength and the technical strength could be because of the booming DeFi trend which doesn’t lead to the value related to Ethereum’s price. One analyst even noted that ETH early weakness signs will propel macro weakness from a technical perspective while the technical weakness could be compounded by a potential miner-started selloff from the recent surge in outflows to exchange wallets.

ETH chart
Source: Glassnode

Ethereum is trading down at the current price of $229 which is around the same level which is visited over the past few days. ETH was caught within a trading range between $230 and $250 over the past months and each drop below the range was fleeting over the past months. Analysts noted that this time it could be different. One prominent trader explained that the closes beneath the $230 gave the rise to the first major signs of bearishness that was seen for quite some time now. He noted:

“ETH HTF Update: Priced has closed below $230 for nearly two consecutive weeks, this weeks wick is looking pretty nasty right now with a huge rejection over the past few days… First major signs of bearish PA showing up on HTF charts.”

Analysts are watching the miner outflow as well which can heavily impact Ethereum. The same trader also explained that he is cautious about Bitcoin’s and Ethereum’s near term outlook because of the many bearish catalysts:

 “While I am super bullish on both BTC & ETH over the next 12/24 months, over the past week there has been a huge spike in miners moving funds on exchanges… This is usually followed by large drops in PA.”

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