Ethereum (ETH) continued to face pressure on Monday as traders observed a critical support area after the latest token price recovery lost steam. The token is still holding near a critical price area, with analysts divided on whether cryptocurrency will continue to recover.
As of writing, on March 23, the token is trading at $2,056, showing a 2.45% decline in a day. The trading volume is showing a strong bullish surge of 17.96%, and is currently standing at $14.14 billion. Over the last week, the coin price has decreased by 8.76%, according to CoinMarketCap.
ETH Holds Critical Band as Downtrend Risk Persists
Crypto analyst Luca highlighted that he has fully scaled out of hedges as ETH has broken above the 2D bull market support band. He added that the reclaim of the lost high-timeframe support range at $2,150 has been a factor for scaling out of hedges. At that time, he said, the setup looked constructive.
The move above the support may have been a deviation rather than a breakout. He also mentioned that he is not taking a firm stance on the lower timeframes at this point.
For now, his focus remains on whether the token is able to hold above the 2D bull market support band. As long as it is holding above that price level, the more likely scenario is still a reversal to the upside. He noted that the coin has again lost the higher timeframe range.
Analysts also warned that further weakness next week could change the picture. In the event that the token breaks its support band, he said he will fully hedge his entire spot position again, which means the downtrend remains intact.
Also Read: Ethereum Holds $2.1K as ETH/BTC Tests Key Strength Level
In this scenario, he believes there will be more room for a drop in the midterm. In this scenario, he expects the token to reach the high-timeframe support at $1,500. He said that this will align with the early April 2025 bottoming formation.
ETH Risks Sharp Downside Move if $2,040 Level Breaks
Moreover, another analyst, TedPillows, mentioned another risk on the chart. He said, “The token is showing signs of a head and shoulders pattern. The head and shoulders pattern is often considered a bearish signal when support is broken.”
Analysts identified $2,040 as a key level to watch. He said, “If the token loses this price, a big move down is likely.” Therefore, this is an important range to watch in terms of short-term direction.
Open Interest and Volume Increase
CoinGlass data shows improved market activity. The future volume increased by 29.65% to $38.65 billion. Meanwhile, open interest grew by 0.92% to $27.88 billion. The OI-weighted funding rate is at 0.0006%, showing that leveraged positions remain active as traders monitor the next move.
Also Read: Zcash Struggles to Hold Support as $300 Reclaim Becomes Critical for Bulls
