Ethereum is on a selling spree after a massive one-week rally that boosted its price by more than 60%. As a result, the leading altcoin is currently scrambling to find stable support levels.
Ethereum struggles to find support as investors start taking profits
Ethereum price has returned 18% of its gains over the past four days. In doing so, it also filled the Fair Value Gap (FVG), a price inefficiency preset of up to $1,383. Analysts expect this drop to find temporary support up to $1,340. However, a breakout of this area makes it even more possible to drop into the $1,284 range created earlier.
Ethereum price is currently approaching $1,340. It has lost more than 8% today.
FXStreet analyst Akash Girimath says ETH could drop another 10% at least at some point. However, a drop to the $1,080 support is possible at the midpoint of the range. This level will likely absorb most of the selling pressure. It will also provide an opportunity for buyers waiting for cash. In some cases, this move is leading Ethereum price below the lowest support levels formed at $994.
The correction will allow market makers to gather liquidity below the equally low levels that could act as a catalyst for a trend reversal.
Bitcoin and altcoin market awaits Fed meeting
The Fed is set to raise interest rates on July 27. For this reason, the markets will likely be extremely volatile, according to experts. Therefore, traders should be cautious as a sweep could occur in the low range from $878.
On the other hand, Ethereum bulls will try to push the price above the $1,284 support level. If that happens, there will be another chance of a comeback in the leading altcoin. If the buyers converge and produce a higher value above $1,700, the bearish thesis will be invalidated. Such a development strengthens the ETH bulls heading towards the psychological resistance of $2,000. But on-chain data shows that Ethereum is far from doing that for now.
Ethereum bulls failed to reach $1,620
As you follow on Kriptokoin.com, Ethereum had a pretty good trip on July 24. It later climbed above $1,640 before falling back to $1,540. In anticipation of the upcoming merger, the crypto market was waiting for ETH to rise above the current $1,620 resistance. But at the time of writing, ETH is back in negative territory.
In fact, investors were expecting prices to drop before the FOMC meeting, as the dire scenario in the chart below shows. ETH’s weighted sentiment fell into “super” negative territory at the time of writing.
Meanwhile, on July 25, Ethereum’s average seven-day gas fee reached a record low of 25,825 Gwei in one year. Additionally, the total value locked in DeFi smart contracts fell from $98.4 billion to just under $50 billion. According to DeFiLlama, Ethereum’s DeFi dominance is declining.
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