Ethereum Faces Risk of Dropping to 3,000 USD Due to This Technical Indicator

Ethereum continues to slide further away from the $4,000 mark. Recent take profit actions and a cautious sentiment are weighing on the market's growth momentum, causing ETH to fall significantly from the peak of $3,941 in July. Technical indicators and on-chain metrics now increasingly suggest that the price may drop below $3,000 in the coming weeks. ETH Faces Obstacles as Accumulation Falls and Bearish Signals Increase Glassnode data shows that the Accumulation Ratio of Ethereum holders closed at its lowest in two months at 27.57% on Saturday, a sign that investors are no longer actively buying more ETH.

According to the on-chain data provider, this metric measures the percentage of existing addresses that increase their ETH balance compared to those that decrease or maintain their balance. When the price increases, it indicates accumulation behavior - commonly seen during bullish phases when confidence in future price increases is high. On the other hand, the falling rate, as it currently stands, signals that confidence is weakening and there is hesitation to buy as prices decline. With fewer holders, ETH lacks the buying pressure often needed to sustain the recovery momentum. Moreover, the Elder-Ray Index of ETH has shown red bars in the last three trading sessions, confirming that the bears have overshadowed the bulls. At the time of writing, this index is at -342.73.

This indicator measures the strength of buyers and sellers in the market. When the indicator displays green bars, it indicates a strong dominance of buyers and an increasing upward momentum. Conversely, like ETH, the downward momentum increases when red bars appear with a continuing expansion in size. These red bars indicate that selling pressure is not only present but also increasing over time. ETH Moves Towards 2,745 USD As Buyers Pull Back ETH is currently trading at $3,457, just below the important resistance level formed at $3,524. If the accumulation weakens, the downtrend could pull the price down to the next key support level at $3,067. If this support level is broken, ETH may slide further to test the $2,745 area.

On the contrary, a new wave of demand could change market sentiment and drive a recovery. In that case, ETH may attempt to break through the resistance level of $3,524. A successful breakout could pave the way for a prolonged price increase towards $3,859.