- Ethereum price has been in a strong recovery in the past few days.
- It hit an important resistance at the $2,000 level.
Ethereum price has had a strong recovery in the past few days as investors worry about the cryptocurrencies industry and falling transaction counts. ETH is trading at $1,963, which is a few points below this week’s high of $2,036.
ETH recovery fades
Ethereum and Bitcoin made a strong uptick on Monday and early Tuesday as investors continued buying the dip.
The rally was in sync with what European stocks and American futures did. In Europe, the CAC 40, DAX, and FTSE 100 indices rose by more than 0.50%.
Now, Ethereum price is falling as American futures point to a lower open. Futures tied to the Dow Jones have declined by more than 300 points while the Nasdaq 100 index has dropped by over 180 points. In the past few months, Ethereum and Bitcoin prices have had a close correlation with Nasdaq 100.
Meanwhile, a closer look at internal data shows that the number of transactions in Ethereum’s ecosystem has been in a downward trend after soaring to an all-time high in May 2021.
Learn more about how to buy Ethereum.
It is clear to see why Ethereum transactions have declined. For example, the performance of Decentralized Finance (DeFi) has weakened. According to DeFi Llama, the total value locked (TVL) has dropped to more than $150 billion to about $70 billion.
Similarly, the performance of Non-Fungible Tokens (NFT) has been a bit weak lately. Recent data shows that NFT volume in platforms like OpenSea and Rarible have dropped by more than 50% this year. There is a likelihood that the trend will continue weakening as interest rates rise.
THe same trend is happening in the metaverse and other free-to-earn blockchains like Decentraland and Axie Infinity.
Ethereum price prediction
On the 4H chart, we see that ETH price has been attempting to make a comeback. It rose to a high of $2,015, which was the highest level since May 24th. On the hourly chart, this price was along the descending trendline that is shown in brown.
Ethereum price has moved above the overbought level and is slightly above the key support level at $1,895. Therefore, there is a likelihood that the coin will retest the key support at $1,895 and then resume the bullish trend. A bullish recovery will be confirmed if it moves above the resistance at $2,000.
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