Why Ethereum may touch sub-$3000 levels amid delay in the ‘Merge’ upgrade
Ethereum price is in a tough spot after the recent bounce from a support level. Although the uptick is bullish, there might be a revisit or perhaps a sweep of the said barrier before a full-blown uptrend begins.
Ethereum price action between 24 January and 27 March created a symmetrical triangle pattern, obtained connecting the three lower highs and four higher lows formed. This technical formation forecasts a 34% move to $3,818, determined by adding the distance between the first swing high and swing low to the breakout point.
On 27 March, Ethereum price breached this setup at $2,837 and rallied 22%. While the initial upthrust was impressive, it faced exhaustion leading to a 17% pullback to tag the support level at $2,952.
A bounce from this barrier has led to a 7% upswing so far with a minor retracement on the cards. Due to the current state of BTC, this move could send ETH to revisit the 11 April swing low at $2,947.
If sidelined investors step in, causing a sudden spike in buying pressure, another leg-up is likely to will propel ETH to retest the 200-day Simple Moving Average (SMA) at $3,493.
Due to the significance of this hurdle, a successful move above it will indicate a resurgence of buying pressure and catalyze a bull run to $3,833 a.k.a the symmetrical triangle’s forecasted target.
Although unlikely, a highly bullish case could see ETH tag the $4,000 psychological barrier, bringing the total gain to 25%.
ETH Perpetual Futures | Source: Tradingview
Supporting the short-term correction of the Ethereum price is the supply distribution chart based on the number of addresses. The whales holding between 100,000 to 1 million ETH have been on a downtrend since August 2021.
These holders’ numbers have dropped from 154 to 140
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