Ethereum’s price might be heading for a serious drop, according to some technical analysis. While there have been brief periods of recovery, the overall market trend still favors the bears.
Technical Analysis Points to a Potential Crash
A recent analysis on TradingView suggests Ethereum could dive to $1,400 if the current downward trend continues. This prediction is based on several key factors:
A Stubborn Fair Value Gap (FVG)
The 4-hour Ethereum chart shows a significant Fair Value Gap (FVG). This gap formed after a 10% price drop last Sunday and represents a zone where selling pressure heavily outweighs buying. Ethereum has twice tested this gap and been swiftly rejected, highlighting the strong resistance. Another rejection could send the price tumbling below $1,400.
Fibonacci Resistance
Ethereum is currently trading within the “golden pocket” of a Fibonacci extension, drawn from the April 9th low of $1,383. Unless the price decisively breaks above this zone and heads towards the next Fibonacci level ($1,724), a significant drop below $1,400 is likely.
Weakening Momentum Adds to the Bearish Outlook
The Stochastic RSI, a momentum indicator, is adding to the bearish pressure. It’s approaching overbought territory on the daily chart, suggesting a potential reversal. This, combined with the FVG resistance, strengthens the case for a price drop.
The recent rejection at $1,650 further supports this bearish outlook. If selling pressure intensifies, the price could easily fall to $1,400 or even lower. As of this writing, Ethereum is trading around $1,627.
