After a slight price decline on Friday, Ethereum (ETH) showed great resilience, climbing 2.84% in the last 24 hours. Commenting on the altcoin’s possible next moves, crypto analyst Ali Martinez outlined a potential trajectory towards a new all-time high at $6,000.
Ethereum is now in the critical support zone – here’s why
In an X article on Saturday, Martinez shares that Ethereum is currently testing a key support level at $2,400. Notably, Ethereum slipped to around $2,410 on Friday and has since remained in this price zone after a recent rejection at $2,500. According to Ali Martinez, ETH must hold support at $2,400 to avoid breaking an ascending channel that extends through July 2023.
#Ethereum tests a key support zone at $2,400. If this level continues, we could see $ETH aiming for an upper limit of the channel near $6,000! pic.twitter.com/W8J8WVy5CL
– Ali (@ali_charts) October 26, 2024
Based on the analyst’s trading chart, a successful retest of the specified support zone will allow ETH to surpass the $3,000 mark before experiencing consolidation between $3,350 and $3,750. Subsequently, another price breakout will occur, which is expected to push Ethereum price towards the upper end of its ascending channel around $6,000, indicating a potential gain of 142% from the current market price of the asset.
However, if Ethereum bulls fail to hold support at $2,400, the altcoin could fall 40% to find a new support level at $1,500. To avoid significant losses in this high “risk/reward” situation, Ali Martinez advised traders to set a stop loss between $2,150 and $2,300.
Negative Coinbase Premium Index Signals Bearish Sentiment for ETH Market
Separately, CryptoQuant analyst Darkfost noted that the Ethereum Coinbase Premium Index is currently at -2 and very negative. According to Darkfost, this development indicates that US institutional investors or market whales are currently aggressively offloading their ETH holdings.
For short-term traders, this is a strong bearish signal as Ethereum will likely see a downtrend in the coming days. However, Darkfost claims that long-term traders might want to use such a price drop as a perfect accumulation opportunity.
At the time of writing, ETH is trading at $2,473 per unit. Although the altcoin may have seen a minor gain over the past day, a decline of 6.47% and 6.27% over the past seven and thirty days, respectively, still leaves investors with a lot to be desired. Additionally, Ethereum’s daily trading volume, valued at $12.22 billion, reflects a decline of 48.27%, representing reduced market liquidity and potentially increased price volatility.
Featured image from Dribble, chart from Tradingview
