Ethereum Drops 10% as Bitcoin Weakness Pushes ETH Toward $2,120 Support

Ethereum (ETH) continued its decline as the strong selling pressure in the crypto market continued to follow the weakness of Bitcoin, keeping Ethereum firmly under the control of the bears.

At the time of writing, ETH is trading at $2,189, down 10% over the last 24 hours, according to data from CoinMarketCap as of 2 February. Daily trading volume stood at $53.64 billion, while ETH’s market capitalization fell to $267.55 billion, reflecting continued risk-off sentiment among investors.

Source: CoinMarketCap

The weakness in the market was further accentuated as ETH closed both its daily and weekly candles in the bearish region. It has been observed that the price movement of ETH closely follows the price movement of Bitcoin, and there are no signs of it developing strength in the current market environment.

Ethereum Struggles Amid Bitcoin Dominance

Popular crypto analyst CRYPTOWZRD, posting on X, said that the overall structure of Ethereum is still weak because of the dominance of Bitcoin. The analyst also noted that the ETH/BTC trading pair is weak too, which further supports the weakness of ETH against Bitcoin.

Source: X

As CRYPTOWZRD suggests, a possible push towards the $2,580 resistance area, and subsequently another wave of selling pressure, may be the catalyst that brings about further downturns, especially if Bitcoin attempts to close its CME futures gap.

Looking at the broader market, ETH is currently moving towards the $2,120 support level, which is seen as a very important short-term level. On the other hand, the $2,800 level is still the main resistance level.

If Bitcoin is unable to regain its support levels and continues to trade under pressure, Ethereum is expected to continue trading in a sideways-to-lower trajectory. Another factor that is expected to influence the next move of Ethereum is Bitcoin dominance.

Short-Term Price Outlook Remains Weak

In the intraday chart, Ethereum has been displaying strong price movements, but overall, there has been a strong bearish trend. A return to $2,583 and subsequent rejection could indicate a further short-term downturn. There is also a possibility of a temporary rise to $2,700, based on CME gap dynamics.

Also Read | Ethereum Tests Support as Traders Eyes a Break Above $3,000 Mark

Ethereum Momentum Indicators Show Weakness

The current weekly Relative Strength Index (RSI) for Ethereum is at 33.87, which is significantly lower than the signal level of approximately 42.45.

Price remains below the entire moving average ribbon, reinforcing the bearish trend. The 20-week SMA (~$3,312), 50-week SMA (~$3,081), 100-week SMA (~$3,054), and 200-week SMA (~$2,451) are all positioned above the current price.

Momentum indicators remain on track to indicate control on the downside. The MACD line is close to -140.7, and the signal line is close to -244.2. The histogram is close to -103.5. It is likely that until momentum indicators start showing signs of turning positive, Ethereum will continue to face pressure rather than entering a recovery phase.

Also Read | Ethereum (ETH) Gains as Bitmine Stakes $610 Million Signaling Institutional Confidence