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The cryptocurrency market did not start off well in the second quarter of 2024, continuing to instill fear and worry among investors. Ethereum’s price could not surpass the $4,000 resistance level, leading to a focus on the downside. Although the crypto market is currently experiencing a downturn, seeing an uptrend in the near future is still possible.
Daily Ethereum Chart Analysis
On the daily timeframe, Ethereum‘s price faced rejection at the $4,000 level in March and has not yet recovered. The market also failed to reclaim the $3,500 level, retreating to a lower point from this region.
Currently, the Relative Strength Index (RSI) has also fallen below 50%, making the $3,000 support level seem like a likely target. However, since the price is still trading above the 200-day moving average, the uptrend may not be over yet.
Four-Hour Chart Analysis
Looking at the four-hour Ethereum chart, the recent market consolidation is more apparent. The price formed an ascending wedge and broke downward, a classic continuation pattern for a downtrend.
As Ethereum approaches the $3,000 support level, the RSI is dropping below the 30% mark, indicating that Ethereum is oversold in this timeframe. Therefore, it may only be a matter of time before the price potentially rises from the $3,000 support zone.
What’s Happening in the Ethereum Ecosystem?
Ethereum’s price recently fell below $4,000, failing to maintain its upward momentum, and excessive optimism among investors could be a reason for the latest drop. This chart shows data related to funding rates. Positive values support an uptrend, while negative values indicate a downtrend, often reflecting market fear and concern.
As seen in the chart, funding rates have been extremely high lately. This could have led to an extended liquidation process, causing the drop below the $4,000 level. As long as funding rates remain high and thus the futures market is overheated, a sustainable rally is unlikely.
