Ethereum’s recent price decline has sent shockwaves through the market, with the cryptocurrency slipping below $4,200 and shedding over $44 billion in market value in just a week. Traders are now closely watching the $4,000 psychological level to see if bulls can hold the line. With ETH down more than 15% from its all-time high of $4,953 set just a month ago, both technical and macroeconomic headwinds are at play.
Currently trading at $4,173, Ethereum has seen a 6.89% drop in the past 24 hours and an 8.13% decline over the week. The sharp pullback was accompanied by a surge in trading volume, which rose by 122% to $41.86 billion. The market cap now stands at $500.67 billion.
From a technical standpoint, ETH broke below key support levels, including the 30-day SMA at $4,465, the 78.6% Fibonacci retracement at $4,378, and the $4,394 horizontal support. Momentum indicators confirm the bearish trend, with the RSI at 18.7 indicating extreme oversold conditions and the MACD histogram at -13.94 showing a further downside momentum.
The recent sell-off was likely triggered by cascading liquidations, with $452 million in total liquidations in the last 24 hours. The majority of these liquidations were long positions, suggesting that traders’ stop-loss orders were hit when ETH dropped below $4,400. The critical support zone now lies between $4,221 and $4,000, with a potential downside target of the 200-day EMA at $3,393 if this level is breached.
In terms of sentiment and security risks, the Fear & Greed Index dropped to 47, indicating a shift from mild optimism to caution among traders. Ethereum’s higher turnover ratio compared to Bitcoin reflects a trend of traders offloading higher-beta assets like ETH amid uncertainties around Federal Reserve policies and Chinese market turmoil. On the security front, reports of phishing campaigns targeting EIP-7702 wallets have raised concerns, with $150,000 being stolen through malicious contract approvals. Industry responses, such as MetaMask’s plan to introduce a “transaction simulation” feature, will be crucial in addressing these security risks.
Overall, while Ethereum is facing short-term volatility, it remains above its 200-day EMA at $3,393, maintaining its long-term uptrend. Traders are advised to closely monitor key support and resistance levels at $4,000, $4,394, and $4,465 to gauge the cryptocurrency’s next moves in the market.