On Thursday, the ETHUSD exchange rate shows positive dynamics, recovering after falling by 17% at the beginning of the week. Ethereum has been highly volatile in recent days amid global economic events. The recent drop below $3000 has led to significant losses among investors. The low recorded on February 3 was Ethereum's largest three-day correction since May 2021.
The latest price decrease is due to macroeconomic factors, including changes in US tariffs on China, Mexico and Canada. Plans by the White House to impose additional tariffs on goods from the EU have also been unveiled. These measures increased uncertainty in the markets, which affected the price of cryptocurrencies.
Ethereum continues to lag behind Bitcoin, which makes it a less attractive asset for investors. There are several factors indicating the possibility of further decline of the second cryptocurrency.
— Ethereum has become an inflationary asset. Its supply has increased by 45 357 units in the last month. This breaks the promise of a deflationary model after the transition to Proof-of-Stake.
— Slowing ecosystem growth. Ethereum is behind other blockchain platforms in terms of fee revenue, ranking sixth and losing to USDC and Solana.
— Validator churn. The number of validators has fallen by 1% in the last month, indicating a decline in confidence among network members.
Technical analysis of ETHUSD on the daily timeframe (D1) demonstrates the formation of a downtrend.
Within the wave analysis, the price is in the process of forming a quadruple ascending wave on the H4 timeframe. However, the Relative Strength Index indicator (standard parameters) points to the probability of reversal and the beginning of the fifth downward wave, as it fixes convergence.
Signal:
The short-term outlook for ETHUSD suggests selling.
The target is at the level of 2200.000.
Part of the profit should be taken near the level of 2570.000.
A stop-loss could be placed at the level of 3225.000.
The bearish trend is short-term, so a trading volume should not exceed 2% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
