Ethereum (ETH), the world’s second-largest cryptocurrency by market capitalization, is currently walking a tightrope as the recent price movement failed to instill bullish confidence among investors. The past few weeks have seen ETH prices fluctuating, with highs that appeared promising but inevitably led to disappointing lows. The bulls’ attempts to break through the resistance have so far been unsuccessful. The question now at the forefront of every crypto investor’s mind is: Will the Ethereum price decline even more?
The Current Ethereum Landscape
As of mid-May 2023, Ethereum is struggling to maintain its footing. The bears are applying considerable pressure, and despite the bulls’ best efforts, Ethereum’s price has been on a downward trajectory.
Recent on-chain data reveals a crossover in the Ethereum taker buy/sell ratio, a signal that has traditionally indicated a peak in the asset’s price.
A noteworthy intersection has been observed in the Ethereum Taker Buy/Sell Ratio’s 280-Day and 476-Day Moving Averages (MAs).
This information, highlighted by a CryptoQuant analyst, shows a similar pattern to one formed in May 2021, which coincided with the bull rally’s peak for Ethereum. The critical metric in focus here is the “Ethereum taker buy/sell ratio.” Due to this reason, such a pattern may be bearish for ETH price as it previously initiated a downward.
Additionally, the Ethereum network is currently grappling with issues stemming from skyrocketing gas fees, the expense tied to transactions, encompassing those executed by smart contracts. Over the previous month, the average transaction fee has remained above $9, significantly dampening the appetite for DApp utilization.
In terms of Ether, the overall deposits on the Ethereum network have plummeted to their lowest point since August 2020. This situation has brought intense bearish pressure on the ETH price chart.
Will ETH Price Fail To Recover?
Lido Finance, an Ethereum-based liquid staking platform, currently maintains a buffer of 452,710 Ether for withdrawals. Notably, bankrupt crypto lending company Celsius has laid claim to 94.5% of this amount. The consequences of this withdrawal of ETH are yet unclear, but a potential surge in sell-side pressure on this alternative cryptocurrency is anticipated.
Analyzing the 4-hour price chart, ETH price has made a sharp decline today after facing resistance near $1,838. The price quickly dropped below the 38.6% Fib level and is currently trading at $1,797, declining over 2% in the last 24 hours.
The RSI level has significantly dropped below its midline, hinting that buyers are losing control. If bulls fail to defend the $1,760 level, it may begin another bearish trend for the ETH price. However, a pullback may occur if there is a significant bullish sentiment with a breakout above $1,840, which may drive the ETH price above $1,900.