Ethereum Approaches Realised Price Support: Potential for Price Recovery?

Ethereum’s price has dipped below $1,600, nearing its realised price of $1,585, historically a precursor to rebounds. Mixed technical indicators signal a strong downtrend, with support expected around $1,450-$1,550. Recent upgrades have decreased network fees significantly, but this may indicate a potential rebound. Economic uncertainty has also affected trader activity.

Ethereum (ETH) has fallen below the $1,600 threshold, indicating a potential key accumulation phase according to on-chain and technical analysis. Currently trading near its realized price of approximately $1,585, this level has historically signalled significant price rebounds. Previous bull runs for Ethereum commenced when the price approached or dropped below this threshold, suggesting a moment of potential recovery for long-term holders.

Despite this historical precedent, the technical indicators present a mixed picture. The price has dipped beneath the 20-day moving average and remains significantly below the 200-day average, reflecting a strong downtrend. The relative strength index (RSI) hovers near 40, signalling weak momentum, although not yet indicating an oversold condition. The condition of daily Bollinger Bands also shows reduced volatility, hinting at a forthcoming decisive price movement.

If the downtrend continues, ETH may find support between the $1,450 and $1,550 range, which has historically been a bottoming area. Immediate resistance is at approximately $1,670, while a more potent overhead resistance could be encountered at the $1,930 level. This suggests that any recovery may face challenges before significant upward momentum can be established.

Fundamentally, Ethereum’s performance on layer 1 has declined since the recent Dencun upgrade, as highlighted in a Binance Research article. Despite a 16-fold increase in scalability from the introduction of blobs, layer 1 fee revenues have decreased, leading to user migrations to less costly layer 2 solutions. This shift has diminished Ethereum’s status as “ultrasound money,” reducing its competitiveness against faster, lower-fee alternatives like Solana (SOL) and BNB Chain (BNB).

Recent analysis from Santiment indicates Ethereum transaction fees have hit a five-year low, averaging $0.168, signalling a drop in usage and network congestion. However, historically low fees often precede price rebounds, and Santiment points out that investor reluctance towards an asset can lead to unexpected recoveries when development remains robust. Additionally, the broader macroeconomic environment contributes to the pullback, with traders showing heightened sensitivity to economic news and tariffs, thus postponing ETH-related activities until conditions become clearer.