Ethereum Faces Selling Pressure: Coinbase Premium Index Plunges, Exchange Supply Rises, Price Could Break Key SupportEthereum (ETH) price has been under sustained pressure recently, falling below $2,400 for the second time in three days. While the wider market may be hopeful that the latest decline marks a bottom, on-chain analysis points to a different narrative
Ethereum Faces Selling Pressure: Coinbase Premium Index Plunges, Exchange Supply Rises, Price Could Break Key Support
Ethereum (ETH) price has been under sustained pressure recently, falling below $2,400 for the second time in three days. While the wider market may be hopeful that the latest decline marks a bottom, on-chain analysis points to a different narrative. Investors are moving away from Ethereum, with the Coinbase Premium Index plunging, indicating a potential for further significant price declines.
Since surging to $2,800 on August 24, investors have been cautiously optimistic about Ethereums ability to retest $3,000. However, these expectations have not been realized, and ETH price has continued to decline, now trading around $2,345.
Coinbase Premium Index Plunges, US Buy Pressure Weakens
The Coinbase Premium Index measures the difference between the spot price of Ethereum on Binance and the spot price of Ethereum on Coinbase. A high value indicates significant buying pressure from the US, while a lower value suggests that US investors are no longer buying and are instead selling.
According to CryptoQuant, the Coinbase Premium Index has plummeted to -0.042, indicating a significant decline in buying pressure from US investors. This trend raises concerns about the future trajectory of Ethereum's price.
Exchange Supply Surges, Exacerbating Potential Selling Pressure
In addition to waning buying pressure from US investors, the supply of Ethereum on exchanges is also rising. Santiments on-chain data shows that the amount of ETH on exchanges has risen to over 21 million, up from 19.94 million a month ago, indicating that more tokens are flowing into these centralized platforms.
Low exchange supply is generally a bullish sign, as it indicates that most investors arent planning to sell anytime soon. However, in the current context of Ethereum, the surge in exchange supply signals significant potential selling pressure, which could lead to further price declines.
Ethereum Price Prediction: Break Below Support Could Accelerate Downside
From a weekly chart perspective, ETH price has been forming a series of higher lows since December 2022. However, the price retracement in early August completely erased the bullish bias that the cryptocurrency could jump to a higher value.
Currently, Ethereums price sits between the demand zone of $2,200-$2,350. A break below this zones lower limit could see its price drop to $2,048. Additionally, the Relative Strength Index (RSI) is below the neutral level, indicating bearish momentum around Ethereum. Should this persist, it could accelerate the downside towards $2,200.
A break below the $2,200 support level would be highly bearish as Ethereums price could then fall all the way to $1,577.
Potential Rebound Opportunity
Despite the pessimistic outlook, hope remains. If buying pressure from US investors and the broader market increases, Ethereum could rebound. If this occurs, ETHs price could jump back to $2,800.
In conclusion, Ethereum is currently facing headwinds from several fronts, including waning US buy pressure and surging exchange supply. A break below the key support level of $2,200 could accelerate a downside move towards $1,577. However, if buying pressure from US investors and the broader market increases, Ethereum could rebound and jump back to $2,800. Investors should closely monitor these key indicators and support levels to make informed investment decisions.
Disclaimer: The content of this article is sourced from the internet. The copyright of the text, images, and other materials belongs to the original author. The platform reprints the materials for the purpose of conveying more information. The content of the article is for reference and learning only, and should not be used for commercial purposes. If it infringes on your legitimate rights and interests, please contact us promptly and we will handle it as soon as possible! We respect copyright and are committed to protecting it. Thank you for sharing.(Email:[email protected])
