Ethereum
Will Ethereum fall below $2,500 in May? While looking closer
- ETH briefly broke support and traded as low as $2,852 on May 1.
- Its futures open interest has declined significantly since April 10.
Ethereum [ETH] recently crossed its 20-day simple moving average (SMA), putting it at risk of further decline in the near term.
When an asset’s price falls below its 20-day SMA, it suggests that the asset’s short-term trend is down.
Market participants often view this as a sign that sellers are in control and that the price of the asset will likely continue to fall.
Readings of ETH price action on a 1-day chart showed that its price fell below its 20-day SMA on April 30.
As coin sales intensified, ETH broke support and closed the trading session on May 1 at the low of $2,850.
Source: ETH/USDT on TradingView
The bulls are nowhere to be found
Although the coin’s price has retraced over the past 24 hours to trade at $2,913 at press time, the bullish pressure remains too weak to support a significant rally in the near term.
AMBCrypto found that on May 1, ETH’s MACD line (blue) crossed its signal line (orange) in a downtrend as the coin fell below support.
This intersection is a bearish sign. The two lines below the zero line, when they occurred, confirmed the existing downtrend and signaled the possibility of a further decline in the price of ETH.
Also confirming the strength of the current market downtrend, ETH’s Aroon Down Line (blue) was at 92.86% at the time of writing.
This indicator identifies an asset’s trend strength and potential trend reversal points in its price movement.
When the Aroon Down line is near 100, it indicates that the downtrend is strong and the most recent low was reached relatively recently.
Furthermore, major ETH momentum indicators indicated a significant decline in demand for the altcoin. Its relative strength index (RSI) was 36.46, while its money flow index (MFI) was 33.96.
The values of these indicators showed that market participants preferred the distribution of ETH over the accumulation of newer coins.
Source: ETH/USDT on TradingView
AMBCrypto’s assessment of ETH network activity based on a 30-day average confirmed the decline in demand for the altcoin over the past month.
Read Ethereum [ETH] Price prediction 2024-25
According to Santiment data, the daily number of addresses involved in at least one ETH transaction over the past month has fallen by 7%.
Likewise, the number of new addresses created on ETH has decreased over the past month. On-chain data showed that this figure decreased by 10% over the last 30 days.
Source: Santiment