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Ethereum (ETH), the second-largest cryptocurrency by market cap, is on the verge of a key technical pattern: a potential death cross formation on its daily chart.
A death cross occurs when the 50-day simple moving average (SMA) crosses below the 200-day SMA, typically indicating potential bearish momentum. It is widely watched by technical analysts as a signal of weakening price action and potential additional decline.
Currently, Ethereum’s 50-day SMA and the longer-term 200-day SMA have converged and might make a crossover in the next few days. If a death cross occurs, it would mark the first on the daily chart in months, dating back to late February, raising fresh concerns across the crypto market.
To cap it all off, ETH has struggled to regain previous highs and remains locked in a trading range below the daily SMA 200 at $2544.
Is it time to panic?
At press time, ETH was trading up 0.32% in the last 24 hours to $2462 and up 10% weekly. In the event of a fall, support is envisaged in the range of $2,000 and $2,100.
If the death cross formation is invalidated, Ethereum will attempt to break above the daily SMA 200 barrier at $2,544 before aiming for $3,000.
Ethereum's validator architecture, the foundation of its proof-of-stake security scheme, is quietly evolving, contributing to positive fundamentals.
Ethereum recently surpassed a psychological threshold: 35 million ETH are now locked in staking contracts, accounting for around 28.3% of the entire supply.
With more than a quarter of the supply immobilized and another 19% held in long-term "hodl" addresses, the tradable float is reaching pre-Merge levels. This development may result in more spot volatility as thinner order books magnify both rallies and shakeouts.
Vladislav Sopov
U.Today Editorial Team