Ethereum, psychological indicators collapse... Deja vu of 2023's brutal year?

▲ Ethereum (ETH)

Ethereum (ETH) investor sentiment has plummeted to its worst level since the 2023 bear market, with fears of a major support line collapse and further declines overwhelming the market.

According to Cointelegraph, a cryptocurrency specialized media outlet, on May 20 (local time), CryptoQuant analyst Darkfost stated that Ethereum investor sentiment, measured based on the Binance taker buy/sell ratio, has fallen to its lowest point since September 2023, when it dropped to $1,600. Darkfost pointed out that this clearly shows how much investor sentiment towards Ethereum has deteriorated in recent weeks. The weekly buy/sell ratio dropped to 0.91, indicating that sellers completely dominate the market in Binance futures order books. Aggressive sell orders are significantly overwhelming buy orders.

Ethereum has been trading in a broad range for the past five years, but despite solid fundamental analysis factors, it remains weak at the lower end of this range, which is interpreted as a negative signal for the market. Darkfost mentioned that while it is difficult to accurately predict such situations, when the market is overly skewed in one direction, conditions can sometimes form for sharp volatility that moves against market consensus. Analyst Daan observed on Wednesday that Ethereum has returned to a key support and resistance level after a month of mixed performance. Daan explained that this level is similar to the $2,800 mark, which has been very viable and significant over the past few years, and warned that losing this support could push Ethereum back below $2,000.

Trader Kamaran Asghar also reported that Ethereum is retesting its ascending trendline support, but momentum indicators continue to show weakness. Asghar stated that while the structure is holding for now, selling pressure is intensifying, and if Ethereum decisively breaks this level, a larger downward movement could quickly follow. Macroeconomic trader Rafaela Rigo maintained an extreme bearish outlook, predicting to her 164,000 X (formerly Twitter) followers that Ethereum could drop to $800 during this bear market, advocating for a massive market reset. With Ethereum falling 8% over the past seven days and dropping to just under $2,100 in late Tuesday trading, its lowest in six weeks, the future outlook is bleak.

Despite positive news that the U.S. Senate passed a bill that could potentially end the war with Iran, Ethereum has shown no signs of recovery. The next support zone is $2,000, and the consequences of this line breaking are painfully clear. Ethereum's previous low on February 6 was just above $1,800. A CryptoPotato article predicted that as Ethereum selling pressure overwhelms buying pressure, the $2,000 support level will be a psychological bulwark determining future direction.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*