Ethereum's price has dropped another 13% over the past week. During Monday's early Asian hours, the leading altcoin plunged to $1,997.
This marks its lowest level since December 2023. The cryptocurrency may soon slip below the critical $2,000 support level once again as bearish sentiment grows.
An assessment of the ETH/USD chart reveals the altcoin trades significantly below its Ichimoku Cloud. This pattern has persisted since January 25. At press time, the Leading Spans A (green) and B (red) form dynamic resistance above the altcoin's price at $2,346 and $2,742, respectively.
The Ichimoku Cloud tracks momentum of market trends and identifies potential support or resistance levels. When price trades above this cloud, the market is in an uptrend. Conversely, when price falls below the cloud, the market is in a downtrend. In ETH's case, the cloud acts as dynamic resistance above its price, reinforcing the likelihood of continued downward movement.
ETH's falling prices have plunged many holders into losses. According to Glassnode, the percentage of ETH wallet addresses with an average buy price lower than the current price has dropped to a year-to-date low of 50%.
This means only half of all addresses holding ETH remain profitable. For context, 82% of holders were in profit at the beginning of the year. This trend may worsen selloffs among ETH traders.
Many investors are now attempting to offload their holdings to minimize losses. If selling intensifies, it could further drive ETH's prices down. This would reinforce bearish momentum and potentially trigger more stop-loss sell-offs.
ETH's $2,000 support may not hold if selling pressure persists. This could open the door to further losses in coming days. Readings from its Fibonacci Retracement tool suggest price could fall to $1,924 if demand weakens further.
However, a positive shift in market sentiment would invalidate this bearish projection. If ETH witnesses a resurgence in new demand, it could drive its price to $2,224. Should the coin flip this resistance into a support floor, it could propel ETH's price toward the highly coveted $2,500 region.