Ethereum’s (ETH) price hit a peak of $3,443 on Tuesday. Since then, it has pulled back and is currently trading at $3,063. That’s a 3% drop in just 24 hours.
With the bullish sentiment fading, there’s a real chance Ethereum could dip down to around $2,900. Let’s break down why that might happen soon.
First off, Ethereum's trading volume has dropped along with its price in the past few days. In the last 24 hours, trading volume was about $35 billion, which is down 25% from before.
This price drop shows that demand for ETH is weakening. More sellers are stepping in than buyers. When both the price and volume decrease like this, it suggests that the momentum is fading, which could mean the end of its bullish run.
Traders often see this trend as a sign of uncertainty in the market. This can discourage further trading and might create a cycle of falling prices and volumes.
Additionally, Ethereum’s open interest has fallen to a seven-day low, confirming this slowdown. According to data from Santiment, the open interest, which measures the total number of outstanding contracts in the derivatives market, is now at $8.26 billion. That’s a 12% drop since Monday.
When open interest declines, it usually means traders are closing existing contracts instead of opening new ones. During price rallies, a drop in open interest often indicates that traders are taking profits or cutting losses. In Ethereum’s case, this trend is happening near the peak, as traders might want to secure their gains before a potential reversal.
Right now, Ethereum is trading at $3,063, just above a key support level at $2,942. If market activity stays low, ETH could test this support. If buyers can’t hold this level, we could see a deeper decline toward $2,787.
On the flip side, if market sentiment improves and demand picks up, ETH might bounce back from the $2,942 support level. This could reignite its upward trend, pushing the price past the $3,162 resistance level and possibly back to its cycle peak of $3,443.