ETH breakdown lingers despite the network overtaking Bitcoin in ‘trustless’ money transfer

• Ethereum retraces from the new record high aiming to secure support above $1,700.
• The formation of a rising wedge pattern hints that the correction could be extensive.
• Ethereum network is moving more value in Ether compared to Bitcoin blockchain with BTC.

Ethereum is struggling to sustain the uptrend after rising to a new all-time high. The largest smart contract token was recently elevated above $1,800 but could not continue on the trajectory eyeing $2,000.

Meanwhile, a retreat has come into the picture, whereby Ether is seeking higher support. The bulls in the market are prioritizing support above $1,700 to keep their focus on $2,000. However, short term analysis shows that bears are gaining control and fast, thus the likelihood of Ethereum diving to lower levels.

The 4-hour chart brings to light the formation of a rising wedge pattern. Usually, this pattern is regarded bearish and leads to a trend reversal. Therefore, if validated, ETH may drop toward $1,600.

Notably, the 50 Simple Moving Average (SMA) on the 4-hour chart is in line to provide the much-needed support and help avert the potential losses. Nonetheless, if the bearish outlook remains persistent, Ether will be forced to look for support near the 100 SMA and the 200 SMA.

Similarly, the Moving Average Convergence Divergence emphasizes the growing pessimistic outlook. In other words, the least resistance path is downward until robust support is secured.

ETH/USD 4-hour chart

It is essential to note that Ethereum has recently grown to become the most significant protocol for trustless money settlement, overtaking Bitcoin. An on-chain metric by Glassnode shows that the Ethereum network is moving more value with Ether than Bitcoin blockchain, which uses BTC. Simultaneously, Ethereum 2.0 will review the high gas fees on the network; hence the value transferred might continue to hit higher highs.

Ethereum intraday levels

Spot rate: $1,735

Relative change: -7

Percentage change: -0.4%

Trend: Bearish

Volatility: Low