Ethereum Market Analysis: Traders Stock Up Despite Crash
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Ethereum (ETH) and the rest of the cryptocurrency market remain in a downward spiral several days after Elon Musk announced that Tesla would stop accepting Bitcoin payments. This bearish momentum has only worsened following a cryptocurrency ban announcement by China today.
At press time, the second-largest cryptocurrency trades around the $2,850 level, while Bitcoin trades at a multi-month-low of $38,500.
Despite having plunged by more than 34% over the past seven days, investors continue to acquire ETH significantly.
Recent on-chain data shows that a total of 657,770 ETH worth over $1.9 billion flowed out of exchanges last week. This data suggests that investors and traders are significantly optimistic about the prospects of Ethereum, as it readies to transition to a Proof of Stake (PoS) algorithm soon. At the same time, the amount of Bitcoin sent to crypto exchanges hit 11,933 BTC, worth $486 million.
For context, Ethereum investors continue sending their coins to the ETH2.0 deposit contract, which now holds 4,697,890 ETH worth about $14 billion. This observation is a clear indication of the mind state of investors towards ETH.
Key Ethereum Levels to Watch — May 19
Ethereum has caved under immense sell pressure in the market as it races towards the lower level. That said, the cryptocurrency is trading along a descending channel and has hit the bottom of this channel, indicating that a rebound could occur soon.
ETH needs to break above the $3,300 level, the resting place of the 50-day SMA, before it can regain bullish steam to push higher. A rejection from the 50 SMA could trigger more declines for Ethereum to the $2,600 level.
There is an overwhelming bearish climate in the market at the moment, so traders should be cautious.
Meanwhile, our resistance levels are $3,000, $3,200, and $3,300, and our support levels are $2,700, $2,650, and $2,570.
Total Market Capitalization: $1.86 trillion
Ethereum Market Capitalization: $342 billion
Ethereum Dominance: 18.4%
Market Rank: #2
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