Ethereum’s Price Reaches an Important Resistance Level

The price of Ethereum has rallied sharply in recent days as investors worry about the crypto industry and falling transaction numbers. ETH is trading at $1,963, down a few points from this week’s high of $2,036.

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ETH recovery fades

Ethereum and Bitcoin saw a bounce on Monday, May 30th, and Tuesday, May 31st, as investors continued to take advantage of their buying opportunities. The rally was in line with the performance of European equities and U.S. futures. In Europe, the CAC 40, DAX, and FTSE 100 indices rose by more than 0.50%.

Now the Ethereum price is falling as American futures point to a lower opening. Futures tied to the Dow Jones are down more than 300 points, while the Nasdaq 100 index is down more than 180 points. In recent months, Ethereum and Bitcoin prices have been closely correlated with the Nasdaq 100. A closer look at internal data shows that the number of transactions in the Ethereum ecosystem has been declining after reaching an all-time high in May 2021.

The reason for the decline in Ethereum transactions is clear to see. For example, the performance of DeFi platforms has weakened. According to DeFi Llama, the total value of locked tokens (Total Value Locked) has decreased from more than $150 billion to about $70 billion.

Performance in the NFT industry has also been somewhat weak recently. Recent data shows that trading volume in NFTs on platforms such as OpenSea and Rarible has dropped by more than 50% this year. There is a likelihood that the trend will continue if interest rates continue to rise.

The same trend can be seen in the Metaverse and play-to-earn projects like Decentraland and Axie Infinity.

Ethereum Price Forecast

On the four-hour chart, it can be seen that the ETH price tried to make a comeback. It rose to $2,015, which is the highest level since May 24th. This price was running on the descending trend line, which is shown in brown.

Ethereum price has crossed the overbought zone and is slightly above the important support at $1,895. Therefore, there is a probability that the coin will retest the important support at $1,895 and then resume the uptrend. A bullish recovery will be confirmed if the price moves above the resistance at $2,000.

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(Featured image by WorldSpectrum via Pixabay)

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