Prices of ether (ETH), the native token of Ethereum’s blockchain, fell almost 20% in the seven days to March 9, marking their largest weekly percentage slide since November 2022, according to data from TradingView.
This recent sell-off has decisively penetrated a bullish trendline that began following the low registered after the June 2022 crash of Terra’s algorithmic stablecoin, UST, which inflicted substantial losses on investors.
The breakdown of this trendline suggests that ether’s nearly three-year-long bullish momentum may have concluded, shifting attention toward more significant potential losses. Analysts are now directing their focus to support levels near the lows observed in September-October 2023, approximately at $1,500.
Trendlines serve as vital tools for visualizing the directions in which traders are allocating funds, thus indicating where significant price movements might occur. An ascending or bullish trendline typically reflects levels where demand is expected to be strong enough to prevent further price declines.
However, when a prolonged bullish trendline is breached, as witnessed in the case of ETH, it often signals a weakening of demand or indicates that sellers are beginning to overpower buyers. This shift can suggest a potential move into bearish territory. Such breakdowns frequently prompt additional selling from other traders, which can exacerbate losses.
Ether’s nearly 20% drop has eliminated dual support – both the trendline and the crucial $2,100 area, which has seen repeated seller exhaustion since August.
Looking ahead, the next support level appears to be around $1,500, while the past week’s high at $2,523 represents a critical threshold that bulls must overcome to regain momentum.
