In this ongoing bearish market sentiment, Ethereum (ETH) the world’s second-biggest cryptocurrency badly impacted as it experienced a notable 7% price drop. With this massive decline, ETH is now moving below the 200 Exponential Moving Average (EMA), indicating that it has entered in a downtrend.

ETH below 200 EMA

The 200 EMA is a technical indicator that signals an uptrend and downtrend for any assets. If the asset is moving above 200 EMA on a higher time frame, it indicates that the asset is in an uptrend. Conversely, if it is below the 200 EMA, it signifies a downtrend. 

This is the second time since November 2023 that ETH has fallen below 200 EMA. Earlier on July 4, 2024, ETH fell below the 200 EMA for the first time during this period and remained there for almost six trading days. However, in less than a month ETH once again dropped below this crucial indicator, signaling a downtrend. 

Traders liquidate $76.4 million of ETH positions 

In this downtrend, traders and investors have liquidated a massive $76.4 million worth of long and short positions, according to an on-chain analytics firm CoinGlass. The major liquidation comes from the buyers, who have liquidated a notable 63.16 million of long positions. Whereas, short sellers have experienced only $13.24 million of liquidation.

At press time, ETH is trading near the $3,020 level and has experienced a 2.7% price drop in the last 24 hours. During the same period, it also made a low of $2,988, as per Coinmarketcap data. Meanwhile, the trading volume remains stable indicating that investors’ and traders’ participation has not changed.

Ethereum technical analysis and upcoming levels

According to expert technical analysis, Ethereum looks bearish as it recently gave a breakdown of a crucial support level of $3,150. With this breakdown, there is a high possibility that ETH could fall another 5% and reach the $2,880 level, which is another key support level. 

Following this bearish outlook, ETH’s open interest (OI) has also decreased by 2.5%. This drop in OI signals a lower level of interest from investors and traders. However, due to this continuous price drop, some investors seem dumping their holdings, while others seem to be buying.

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