Ethereum Price Dips Amid Selling Pressure
Ethereum's price recently fell below $2,600, dropping sharply by 5.7% after reaching a high of $2,718. This decline highlights the fading bullish momentum, raising concerns over Ethereum's short-term performance.
Regulatory News Fails to Sustain Rally
Recent regulatory developments initially boosted Ethereum prices. Notable events included the approval of Solana ETF in Brazil, Russia's move to legalize crypto mining, and a lenient fine from the SEC. These events instilled optimism in investors, pushing Ethereum's price upward. However, the upward trend began to flatten near the $2,700 mark, signaling weakening market strength.
The ETH/USD price chart shows that by August 11, bullish momentum was waning, and by August 12, the price dropped to $2,511. This sharp reversal suggests that the market's reaction to the regulatory news was overblown, unable to maintain its trajectory. Resistance at $2,700 proved too strong, causing a price decline as it faced rejection.
On-Chain Data Reflects Increased Withdrawals
The decline in Ethereum's price is mirrored by on-chain data, particularly with increased staking withdrawals. Over 122,000 ETH were withdrawn from staking pools this week, the highest since May, worth around $521 million at an average price of $2,620.
This rise in withdrawals suggests growing selling pressure as investors choose to unstake, possibly to sell their holdings. The Ethereum staking flow chart shows a significant uptick in these withdrawals, increasing market supply and potentially pushing prices down further.
Price Forecast: Bearish Momentum Intensifies
Technical indicators, such as the Ichimoku Cloud, show Ethereum trading below the cloud, indicating a bearish trend. Bears may target $2,500 as a key support level. The Accumulation/Distribution Line (ADL) also shows a decline, pointing to more selling than buying interest.
If Ethereum fails to stay above $2,550, a broader sell-off could ensue, with potential support at $2,400. While long-term regulatory impacts are positive, immediate effects on Ethereum's price are limited. Increased staking withdrawals and fading rally momentum suggest a possible further decline.
Potential for Rebound
For a possible rebound, Ethereum must stabilize around $2,550 with increased demand. If this happens, prices could retest the $2,600 resistance. A successful breakout here could lead to a return to $2,718, signifying a potential reversal.
