These 4 indicators suggest that the price of Ethereum is going down to $2,300

The price of Ether faced resistance after reaching the $2,768 level on October 21. A number of factors have created the rally, including increasing exchange availability, decreasing network activity and weakening techniques.

ETH Coinbase index shows the possibility of selling

Ether (ETH) tumbled 6.5% from its regional high at $2,768, while the ETH Coinbase Premium Index fell below its 14-day simple moving average (SMA) on October 21, indicating a possible sell-off in the near term.

The ETH Coinbase Premium Index, which measures the gap between the price of Ether on Coinbase Pro and Binance, serves as an indicator of US investor interest compared to the rest of the world.

The chart below shows that ETH price corrections occurred when the Coinbase Premium Index fell below the 14-day SMA.

Currently, the indicator is at -0.075, and the 14-day SMA is -0.040, which “shows that sellers have a strong hand in the US market,” CrypptoQuant said.

“ETH Coinbase Premium Index crosses below SMA14, indicating increasing US selling pressure, which could lead to price declines.”

Increase the supply of ETH on exchanges

Another argument for the bears is the increase in ETH supply on exchanges. According to additional data from CryptoQuant, Ether balances hit a four-week high of 15.8 million ETH on October 21.

The balance between total inflows and outflows between centralized exchange wallets shows a sharp increase between October 15 and October 20, when deposits to trading platforms begin to increase.

The increasing supply of ETH on exchanges allows investors to simply send their tokens from their own wallets to the exchange, indicating that they are interested in selling.

Ethereum TVL is decreasing.

Ethereum Total Value Locked (TVL) has been declining since mid-June as shown in the chart below.

TVL on the Layer-1 network fell from a peak of $66 billion on June 3, down 57% to $42.3 billion on August 5, rising to $48 billion now.

Additional data from Defilama shows that Ethereum's TVL has decreased by more than 2% in the last 30 days, due to the poor performance of other layer-1 protocols such as Solana, which has increased by 22% in TVL during the same period.

The increasing TVL reflects the interest of traders in the Ethereum DeFi ecosystem and the inability of the network to attract new users due to relatively high transaction costs, especially those who want to start new projects.

Data from EtherScan shows that Ethereum fees remain consistently high, averaging 11.492 gwei ($0.62). This is significantly higher than the transaction fee on Solana, which currently averages 0.000091 SOL (~$0.015).

Related: Ethereum blob payments on the rise: What do L2s mean?

The ethereal bear pattern suggests a 10% decline in the future

ETH's price action between October 10 and October 23 resulted in an inverted V-shaped pattern on the daily chart. This followed a 19% rally in Ether price at $2,327, which was halted by buyer congestion around the psychological level of $2,800.

Bears have booked profits on this rally, leading to a sharp correction to current levels. As the price looks to complete the inverted V-shape pattern, it could drop an additional 9.7% from the neck of the pattern around the $2,300 demand zone.

Meanwhile, the Relative Strength Index (RSI) is on the decline, dropping from 67 to 52 over the past three days, suggesting that market conditions favor bearishness.

On the downside, key levels to watch are the 200-day EMA at $2,660 and, later, the local high at $2,768.

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.