Ethereum Dead Cat Bounce Puts Price At $3,400, But What’s The Ultimate Target?
Overview
Ethereum continues to face challenges following a significant market crash on October 10. The price of the cryptocurrency has dropped below $3,000 for the first time this week, with analysts suggesting a potential short-term recovery could occur, although the overall trend remains bearish.
Current Market Situation
The recent downturn in Ethereum’s price is attributed to a broader market decline that began after the cryptocurrency reached a new all-time high just above $4,900. This peak was followed by a substantial drop, leading Ethereum into a bearish trend characterized by a Channel Down pattern. Since the establishment of this trend, Ethereum has experienced double-digit declines on two separate occasions, with each decline noted to be 27.50%.
Despite the ongoing bearish sentiment, there has been a slight shift in momentum. After dropping below $3,000, Ethereum formed higher lows on the 1-Day Relative Strength Index (RSI), which some analysts interpret as a bullish signal, at least in the short term. If this bullish divergence continues, Ethereum’s price may recover by around 10%, potentially reaching $3,400. However, this recovery is expected to be short-lived, as analysts predict that bearish forces will soon reassert themselves.
The $3,400 price level is particularly significant, as it coincides with the 1-Day MA50, a moving average that previously served as a point of rejection. The last time Ethereum approached this level, it resulted in a 27.50% crash. Analysts caution that if selling pressure resumes, it could lead to a sharp decline below $3,000, with projections indicating a potential drop to $2,650 before finding a new support level.
Impact on the crypto market
- Ethereum’s price struggles highlight the volatility and uncertainty in the cryptocurrency market.
- The potential for a dead cat bounce indicates that short-term recoveries may not signify a long-term trend reversal.
- The bearish trend could lead to increased selling pressure, impacting investor sentiment and market confidence.
- The significance of the $3,400 resistance level may influence trading strategies for both short-term and long-term investors.
- Continued declines in Ethereum’s price could have a ripple effect on other cryptocurrencies, particularly those closely correlated with Ethereum.
Updated: 11/21/2025, 12:45:45 PM
