With Ethereum hitting one of its largest ever liquidations after the COVID dump in 2020, the market is turning extremely bearish on the biggest altcoin in the market. In the past 24 hours, the liquidations have reached $2.3 billion, with Ethereum facing a loss of $615 million.
The massive liquidations led to a sudden crash in Ethereum prices from $3,000 to nearly $2,100. However, the short-term recovery has bounced the ETH price back above $2,500, while the market cap remains at $311 billion.
While the opportunity seems perfect to buy the dip, the technical signals flashing a sell sign offer an opposing viewpoint. So, should you consider grabbing the biggest altcoin at discounted prices, despite its failed attempt for a bullish run? Let’s find out.
Ethereum Technical Analysis: ETH Struggles at Key Levels
In the daily chart, the Ethereum price creates three consecutive red candles as it fails to overcome the 50-day EMA and the local resistance trendline, dropping the prices from $3,320 to a 24-hour low at $2,120.
The downfall has resulted in a breakdown of the local support trendline. Furthermore, it partially breached the $2,395 swing low. However, the lower price support near its psychological levels has resulted in a quick comeback.
Nevertheless, the exponential moving average lines are hinting at negative crossovers between the 50-100 EMA lines and the 20-200 EMA lines. The daily RSI line has plunged to the oversold levels, resulting in a surge in selling pressure. Thus, the technical indicators maintain a negative viewpoint on the current Ethereum price trend.
Based on the price action analysis, the downfall in Ethereum could find support levels at $2,395 and $2,223 if the downfall continues. On the flip side, the upside potential lies between the price targets of $3,000 and $3,500.
1inch Fund’s Bold Move Amid Market Crash
Despite the falling prices of Ethereum, the generic idea of buying the dip is rising in the broader market. In a recent buying spree, a 1inch investment fund has accumulated Ethereum and Wrapped Bitcoin in the recent crash.
The fund has acquired 7,357 ETH tokens worth nearly $21 million. The average entry price in the biggest altcoin comes at nearly $2,800.
For Wrapped Bitcoin, the fund acquired nearly $5 million worth of 52.07 WBTC at an average price of nearly $5,800. As the fund acquires top cryptocurrencies during the market crash, the underlying confidence and optimism are clearly evident.
Analyst’s Outlook: Is a Reversal Rally on the Horizon?
Focusing on Ethereum, the recent X post by Ali Martinez, a crypto analyst, highlights a massive reversal rally. Despite the current market crash, Ethereum manages to hold an inverted head-and-shoulder pattern.
In the X post, Ali Martinez highlights Ethereum’s possibility to break above the bullish pattern’s neckline at $4,000 if it sustains above $2,700. Based on the Fibonacci levels retraced over the bullish pattern, the upside potential extends to nearly $7,000.
However, Ethereum must overcome the incoming supply waves and also cross the local resistance trendline. The immediate price levels, as per the analyst’s technical outlook, are the $3,000 psychological mark and the $3,185 level.
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