Ethereum price has been under pressure in the past few days as the strong relief rally experienced last week faded. The ETH token is trading at $3,254, which is a few points below the weekend high of $3,417. It has declined by over 33% from its all-time high, bringing its total market capitalization to over $396 billion, meaning that its investors have lost over $100 billion in the past few months.
Ethereum is the second-biggest cryptocurrency in the world. Yet it is the most important platform in the blockchain industry thanks to its smart contract technology.
Today, Ethereum’s technology has been used to build some of the best decentralized projects you know. For example, it was used to build metaverse platforms like Decentraland and even cryptocurrencies like Shiba Inu. It is by far the biggest player in the decentralized finance (DeFi) industry.
However, as a relatively old blockchain platform, Ethereum is not perfect. It is one of the slowest platforms and its costs are prohibitive. Therefore, this explains why there have been many layer 2 and layer 1 platforms seeking to become the best alternatives to the platform. Layer 1 networks include Solana and Terra while Layer 2 networks are Loopring, Immutable X, Harmony, and Polygon.
Still, Ethereum is taking measures to remedy the situation. For example, last year, the developers launched the London upgrade that introduced important concepts like burning. They are also building the ETH 2.0 upgrade that will transition the network from a proof-of-work to proof-of-stake,
The daily chart shows that the ETH price has been in a strong bearish trend in the past few weeks. Last week, it dropped to a multi-month low of $2,927 and then it quickly made a relief rally. Still, a closer look at the chart shows that it has been in a bearish trend. It has also formed a mini death cross, which forms when the 50-day and 100-day moving averages makes a crossover.
The Relative Strength Index (RSI) has also been in a bearish trend. Therefore, the path of the least resistance for the Ethereum price is lower, with the next key support to watch is at $2,665. On the flip side, a move above the resistance at $3,650 will invalidate the bearish view.