Ether could extend correction to $3,500 amid selling pressure: check forecast

The cryptocurrency market continues its choppy price action, with Bitcoin dropping below the $105k level earlier today.

Ether, the second-largest cryptocurrency by market cap, is also trading below $3,800 after losing 7% of its value in the last 24 hours.

The market could continue its massive sell-off in the near term as there is no macroeconomic relief on the horizon.

ETH dips below $3,800 as spot Ethereum ETFs record massive outflow

Ether is down 7% in the last 24 hours and is now trading below $3,800 per coin.

The negative performance comes as spot Ethereum ETFs recorded over $56 million in outflows on Thursday.

The outflows came as institutional investors are taking a cautious approach to the market.

Market sentiment remains a bit sour at the moment, with investors expecting further bearish price action in the near term. 

The Federal Reserve will meet later this month to discuss whether it will keep interest rates unchanged or cut by 25 basis points as widely expected.

However, due to a lack of economic data in the last three weeks, the Fed could postpone that rate cut, a move that would negatively affect the prices of Bitcoin, Ether, and other major cryptocurrencies. 

The dip could occur before the FOMC meeting if the Fed chair, Jerome Powell, hints at the possibility publicly. 

ETH could drop below $3,500 as bears remain in control

The ETH/USD 4H Chart remains bearish and efficient after facing rejection from the daily resistance level at $4,232 earlier this week.

The rejection level coincides with its 50-day EMA and the 78.6% Fibonacci retracement level.

At press time, ETH is trading at $3,710 and could record further losses in the near term.

If the pullback continues, ETH could extend its decline towards the Friday low of $3,506.

Similar to Bitcoin, Ethereum’s RSI and MACD indicators are extremely bearish. 

However, if ETH recovers, it could rally towards the Monday high of $4,232 before attempting to hit the $4,500 psychological level.

Ether’s 4-H RSI has dropped below the 14-day exponential moving average (EMA), suggesting a change in the direction of the coin’s price trend.

The last two times this crossover occurred, ETH dipped by 49% and 63% after hitting the $4,100 threshold twice. 

In both scenarios, ETH dipped to or below its 200-day exponential moving average (EMA).

If that happens now, Ether could experience a massive drop to $2,500 in the mid-term, representing a 35% drop from its current price. 

Regardless, the Friday low of $3,500 could serve as a strong support in the near term and allow Ether to bounce back.

The general trend of the market remains bearish, with traders recording heavy losses over the past few hours.

Recent data revealed that traders lost over $250 million worth of leveraged positions in the last 60 minutes.