Ethereum Faces Rejection at $2,996, Heading Towards Key Support Level

• Ethereum (ETH) was rejected at $2,996 and is currently moving towards the crucial uptrend support level at $2,880.
• The 1-hour ETH/USDT chart shows a prolonged down-channel formation.
• The recent downtrend in Ethereum’s price can be attributed to the delayed approval of the Ethereum ETF by the SEC.

Ethereum (ETH) recently experienced a setback as it was rejected at the $2,996 mark. The cryptocurrency is now moving towards the crucial uptrend support level at $2,880.

At press time, ETH is trading at $2,902, with a 2.48% decrease over the past 24 hours and a 5.64% drop on a weekly basis. The downtrend that commenced after April 13 has not been successfully reversed thus far.

Despite attempts by buyers to push the price higher, Ethereum has struggled to maintain its position above key moving averages.

The 1-hour ETH/USDT chart clearly illustrates the formation of a prolonged down-channel within the same range, with the price trading below the 50-day and 200-day simple moving averages (SMA), indicating an unfavorable trend for bulls.

Moreover, the Relative Strength Index (RSI) remains unstable at 35, suggesting a somewhat unsustainable trend.

Factors Contributing to Ethereum’s Downtrend

Several factors, including the Dencun upgrade and the delayed approval of the Ethereum ETF, have contributed to the recent downtrend in Ethereum’s price.

Released in March 2024, the Dencun upgrade aimed to enhance the scalability, reduce fees, and improve the efficiency of the Ethereum network as a layer 2 blockchain solution. However, the upgrade failed to meet the expectations of the community, contributing to the bearish sentiment.

Another significant factor impacting Ethereum’s price is the prolonged wait for the approval of the Ethereum ETF. The recent crackdown by the Securities and Exchange Commission (SEC) suggests that the much-anticipated approval may be delayed until 2025, further dampening investor sentiment.

Whale Activity Suggests Accumulation

Despite the overall bearish trend, recent data revealed by analyst “Data Nerd” on May 14 indicates that multiple whales have been withdrawing Ethereum from exchange wallets.

In a 24-hour period, a total of 78,301 ETH were withdrawn, which can be interpreted as a sign of accumulation. This behavior could potentially encourage retail buyers to enter the market, leading to a possible shift in sentiment.

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