Ethereum (ETH) is nearing the $2,000 psychological support level, raising concerns about a potential breakdown as ETFs continue to register outflows.
As Bitcoin witnesses a quick pullback under $83,000, Ethereum is close to testing its $2,000 psychological mark. With a pullback of nearly 12% in the past 24 hours, the Ethereum market cap is down to $252 billion.
As the declining trend in Ethereum gains momentum, is the $2,000 support level breakdown inevitable? Let’s find out.
Ethereum Price Tests $2,000 Support
In the 4-hour price chart, Ethereum showcases a steep correction with two consecutive completion-range breakdowns. After the breakdown of the $3,000 psychological support, Ethereum found crucial support near the $2,500 mark.
However, the market crash in late February resulted in a second-range breakdown with a pullback towards $2,100. The announcement of the U.S. Crypto Reserve led to a quick V-shaped reversal to retest the broken $2,500 level.
However, the bullish failure to hold the trend momentum led Ethereum to take a bearish exit quickly. The downfall in Ethereum has accounted for nearly a 15% pullback. Currently, ETH is trading at a market price of $2,093.
The declining trend has resulted in a pullback in the Chaikin Money Flow Index from 0.32 to near the zero level. This hints at a significant reduction in buying pressure.Â
However, the daily RSI line hints at a potential bullish divergence. This suggests a possible consolidation near the $2,000 psychological mark.
Ethereum ETF Outflows Continue
As Ethereum warns of a potential breakdown of the $2,000 crucial support, U.S. Ethereum Spot ETFs record another day of outflow.
On March 3, the net outflow stood at $12.10 million. This marked the 8th consecutive outflow day since February 20.
Most Ethereum ETFs maintained a net-zero outflow on Monday, while BlackRock offloaded $16.06 million worth of Ethereum into the market. On the other hand, Bitwise registered an inflow of $3.96 million.
Will ETH Price Break Below $2,000?
Given the Ethereum price trend, the downtrend follows a pattern of consolidation ranges followed by breakdowns. As a result, Ethereum could experience consolidation near the $2,000 psychological support level.
However, broader market conditions—such as the potential for tariff wars from the United States—could trigger a significant crash in both global and crypto markets. In this case, Ethereum could break below $2,000 and test the crucial $1,800 support level.
On the bullish side, if Ethereum manages to consolidate, it could eventually test the overhead resistance near $2,400 or $2,530.
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