Ethereum Drops 4% after ETH Prices Find Resistance At $3.8k

Ethereum Oscillating in a Bear Flag, ETH Ceiling at $2.15k
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The Ethereum price is down four percent at spot rates but remains in an uptrend as per the candlestick arrangement in the daily chart.

Overly, buyers are still in the driving seat despite losses of early April 6. In the previous week of trading, ETH is at break even with the greenback.

Despite weakness at the start of the week, the path of least resistance remains upward—a net positive for optimistic traders angling for more gains in the short term—provided prices are above $3.3k primary support.

The Ethereum Merger

In the days ahead, traders are optimistic due to supportive events scheduled in the next few months. Top of the line is the Merger and the eventual transition of Ethereum from a mining network to a staking network where validators can earn rewards from securing the network and block rewards.

As per recent data, over $37 billion of ETH has been locked in the Beacon Chain—the proof-of-stake Ethereum network that runs parallel to the mining blockchain. The Merger will see Ethereum transit fully to staking, deactivating the mining layer.

With the activation of proof-of-stake, Ethereum developers are optimistic that the network would be more energy efficient with a further allowance of improving the network’s scalability. Thus far, Sharding has been identified as one of the scaling options that will supplement current layer-2 options like rollups.

Gas Fees Remain Elevated

Before then, the demand for block space in Ethereum is at record levels, driving Gas fees higher. This is despite the implementation of EIP-1559, which eliminated auctioning and introduced the burning of BASE FEE.

Ethereum Price Analysis

ethereum price analysis

The Ethereum price is down four percent at spot rates as per the formation in the daily chart. Although the path of least resistance is northwards since ETH is in a bullish breakout pattern above $3.3k, the failure of buyers to close above $3.8k and last week’s highs present challenges. Besides, steep losses during the Asian session points to waning upside momentum.

Nonetheless, since ETH is trading within a bullish breakout formation above February 2022 highs and $3.3k, every retracement may offer entries for aggressive ETH bulls. Meanwhile, risk-averse traders may find entries above $3.8k with targets at $4k and $4.5k in the medium term.

On a more cautionary outlook, deep losses below $3.3k nullify the uptrend, allowing sellers to force the coin back to $2.9k.

Technical charts courtesy of Trading View

Disclaimer: Opinions expressed are not investment advice. Do your research.

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