Ethereum (ETH) experienced a significant drop of nearly 10% on February 25th, causing its market cap to dip below $300 billion. This marks the first time since early November 2024 that Ethereum has seen such a decline.
Various indicators, such as RSI and moving averages, are pointing towards a bearish trend. As Ethereum faces this downward movement, experts are closely monitoring for signs of either a further decline or a possible turnaround.
ETH's RSI currently sits at 29, having dropped to 21.3 recently, indicating that Ethereum is in oversold territory for the first time since February 3. This suggests intense selling pressure in the market.
RSI is a key metric that helps traders identify oversold or overbought conditions. A reading below 30 typically signifies an oversold asset, potentially hinting at a forthcoming price rebound. However, an oversold status does not always guarantee an immediate recovery.
In recent days, the number of ETH whales - addresses holding at least 1,000 ETH - has slightly decreased after reaching a peak of 5,828 on February 22. This reversal in trend could be contributing to the selling pressure on Ethereum, indicating that some large holders are reducing their positions.
Monitoring ETH whales is crucial as they have a significant influence on price movements. An increase in the number of whales often indicates accumulation and can support price stability or even drive a rally. Conversely, a decrease may suggest distribution, potentially leading to more selling pressure.
The recent decline in the number of ETH whales could signal cautious sentiment and short-term weakness. Nonetheless, the overall number of whales remains relatively high, implying that despite some offloading, a substantial portion still maintains their positions, which could help mitigate sharp declines.
Ethereum's price recently formed a death cross, where the short-term moving average crossed below the long-term moving average, signaling a bearish trend. This shift led to Ethereum dropping below $2,500. If this downward trend persists, Ethereum could fall below $2,200 for the first time since December 2023, highlighting the prevailing bearish momentum.
To potentially reverse this trend, Ethereum would need to break through the resistance at $2,551, opening the path for a rally towards $2,850. However, until buying pressure increases enough to push the short-term moving average back above the long-term one, the bearish sentiment is likely to persist as indicated by the death cross.