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Ethereum’s (ETH) Price Drop Below $2,200: What Triggered the Plunge?

2 mins
Updated by Ryan James
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In Brief

  • Ethereum's (ETH) price deviated above a horizontal and Fib retracement resistance area and fell below it last week.
  • The weekly and daily time frame readings are both leaning bearish, though the trend's direction is not confirmed.
  • Despite the bearish ETH price prediction, a daily close above the range high can trigger a significant ETH increase.
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The Ethereum (ETH) price has fallen since reaching its yearly high of $2,717 on January 12.

The price returned to a horizontal range that has existed for 54 days. It bounced at the range low and is approaching the range high.

Ethereum Deviates Above Resistance

The weekly time frame technical analysis shows that the ETH price has increased since June 2022, creating three higher lows (green icons). The most recent was in October 2023, accelerating the rate of increase. 

The upward movement took ETH to a high of $2,717 in January 2024, above an important Fib and horizontal resistance area. 

However, the Ethereum price could not sustain its increase and fell below the area last week, creating a bearish candlestick. This movement points to the previous breakout being illegitimate. 

Ethereum (ETH) Price Movement
ETH/USD Weekly Chart. Source: TradingView

The weekly Relative Strength Index (RSI) gives a mixed reading. Market traders use the RSI as a momentum indicator to identify overbought or oversold conditions and to decide whether to accumulate or sell an asset.

Readings above 50 and an upward trend indicate that bulls still have an advantage, whereas readings below 50 suggest the opposite.

While the RSI is falling, it is above 50. Also, it generated a bearish divergence (red) before the decrease but followed that with a hidden bullish divergence (green), effectively canceling each other out.

What Are Analysts Saying?

Cryptocurrency analysts and traders on X are bullish on the Ethereum future trend.

Income Sharks believes that the ETH price will gradually increase toward $3,500.

Ethereum (ETH) Price Movement
ETH/USDT Weekly Chart. Source: X

Eliz883 tweeted a breakout from a descending resistance trend line, suggesting it will increase to $2,400. Inmortalcrypto has similar thoughts, but he indicates the price will increase to $2,500.

ETH Price Prediction: Relief Rally or Reversal?

Similarly to the weekly time frame, the daily one leans bearish. Firstly, it shows that ETH deviated above its range high of $2,375 (red circle). Besides this deviation, the ETH price has traded in this range for 54 days. More importantly, the RSI insinuates the upward movement is over.

Once ETH started its upward movement from $1,500 in October 2023, the RSI increased above 50 (green icon). It stayed there until the price fell back inside the range on January 22, 2024 (red icon).

The indicator could validate the 50-trend line as resistance (red circle). This could coincide with another retest of the range high at $2,375, which also coexists with the 0.382 Fib retracement resistance level.

Then, if the ETH price breaks down from the range, it can fall 17% to the closest support at $1,900.

ETH Price Prediction
ETH/USDT Daily Chart. Source: TradingView

Despite this bearish ETH price prediction, a close above-the-range high of $2,375 can trigger an 18% increase to the previous high near $2,700.

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Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

Valdrin-Tahiri.jpg
Valdrin Tahiri
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona School of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst. (I do not have a discord and will not contact you first there. Beware of scammers)
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