- Ethereum has been largely consolidating throughout the past week as Bitcoin continues lacking decisive directionality
- The crypto has been subjected to some increased selling pressure throughout the past couple of hours, which led its price down to lows of $350 earlier today
- Analysts do believe that the token could be “running on fumes” at the present moment, suggesting that it may not be able to rally any further
- Five factors are may be contributing to this weakness, including multiple recent hacks as well massive downside liquidity
- The confluence of these factors and others may lead it to see further downside in the days, weeks, and even months ahead
Ethereum is currently attempting to rebound after plunging to lows of $350 earlier today. Although the initial reaction to this level was bullish, ETH has been unable to maintain its upwards momentum.
As such, the token may now be positioned to see further downside in the near-term. This may depend somewhat on Bitcoin, as it has been firmly guiding ETH and other major altcoins.
BTC is currently pushing up against its $11,000 resistance, which has proven to be insurmountable.
While speaking about Ethereum’s near-term outlook, one analyst pointed to five simple factors that suggest it may soon see a notable plunge lower.
Ethereum Struggles to Find Stability as Selling Pressure Ramps Up
At the time of writing, Ethereum is trading sideways at its current price of $355. This marks a slight decline from daily highs of $367, but a bounce from lows of $350.
The bounce from these lows at first was intense but has since lost its momentum. This could mean that further downside is imminent in the near-term.
This has been a historically important support level, so a break below this could spark an accelerated decline down towards the support between $315 and $325.
Here are Five Factors That Point to Underlying ETH Weakness
To justify a bearish sentiment, one analyst recently pointed to five factors that he believes could mean downside is imminent for the cryptocurrency.
“I just can’t seem to shake the feeling that ETH has been running on fumes lately. Extremely accelerated DeFi coin market cycles. Kucoin hack. EMN hack. Tons of liquidity below. Stairstepping upwards PA (typically ends in elevator down). Yet, it holds/randomly rallies. Soon I think.”
Image Courtesy of Case_NL. Chart via TradingView.
The confluence of all these factors does indicate that the DeFi hype cycle that helped drive Ethereum to highs of $490 is rapidly coming to an end.
This could indicate that further downside is imminent for the cryptocurrency.
Featured image from Unsplash. Charts from TradingView.