So far, Ethereum has had a rough year. The coin has been losing ground over the last week, compounding a general negative trend
The year 2024 has begun slowly for crypto traders, with most tokens, including Bitcoin and Ethereum, gradually losing value over the last week. This continues a general negative trend since December, when most digital assets reached their recent highs.
However, the latest technical indicators suggest that Ethereum (ETH) is at an important crossroads, with signs of significant upside.
On Wednesday, February 26, ETH traded at $2,426, quite below its recent $4,000 high in December. Like the rest of the crypto market, Ethereum has been trending down slowly.
Still, over the past week, the token has repeatedly defended the $2,400 price point, which indicates strong support at that level. At the same time, there are signs that a significant reversal could be coming.
For one, ETH is approaching a bullish segment of its four-year cycle. Both in 2017 and 2021, the coin peaked significantly, reaching its all-time high (ATH), which took four years to surpass. At the same time, the Stochastic RSI indicator mirrored these trends and is currently oversold.
If these trends hold, Ethereum is set for a sharp move up, surpassing its November 2021 ATH of $4,891. The token could go even higher, thanks to the potential for a short squeeze. Notably, if Ethereum reaches $3,000, over $2 billion in short positions would face liquidations, pushing the token even higher.
Ethereum’s growing acceptance among major financial institutions is the fundamental case for a sharp rise. So far, Bitcoin and Ethereum are the only cryptos with significant institutional involvement. Notably, the Grayscale Ethereum Trust ETF manages $3.217 billion in Ethereum for institutions.
One of these investors is Michigan’s state pension fund, which invested over $10 million in ETH. Still, Ethereum’s institutional backers also introduce new risks, such as exposure to global market volatility. For this reason, reactions to potential trade wars and interest rate policy can lead to rapid sell-offs.
Currently, the breakeven point for large ETH holders is at $2,199, which signals strong support. However, if the price falls below that level, this could trigger significant liquidations, causing Ethereum to fall to its next support at $1,800.
