ETH Price Tanks to $1,540 Amid Major Capitulation, Ethereum Reversal Possible?

The world’s second-largest cryptocurrency Ethereum has once again come under major selling pressure with the ETH price tanking over 2% and dropping all the way to $1,540 levels. While the Ethereum bulls tried to put up a major fight above the $1,600 level, they failed to regain the lost ground.

On-chain data provider Santiment reported: “Ethereum experienced a drop to $1,540, a price level not seen since March 12th. During this period, a significant amount of dormant ETH moved from older wallets. This decrease in the average age of ETH holdings while prices are declining is indicative of capitulation, often signaling potential reversals in the market”.

On the downside, the major support levels for ETH to watch for are $1,550 and $1,370. These are the key support levels where the probabilities of bounce back are higher.

As of press time, the ETH price did bounce back from the first support zone and is trading at $1,579 with a market cap of $189 billion. On the other hand, if the BTC price continues to fall, the Ethereum price can fall further to $1,407.

On the flip side, should Bitcoin’s price experience a rebound, it could exert an upward pressure on Ethereum’s price, potentially turning the $1,575 resistance level back into a solid support zone. This could pave the way for Ethereum to surpass the $1,800 mark and reach the significant psychological milestone of $2,000.

Ethereum Weighted Sentiment Drops

Santiment’s data indicated an increase in the age consumed metric earlier this month, but it has remained relatively stable since then. This lack of significant selling activity from long-term holders in recent days has been notable.

The overall market sentiment appeared pessimistic, and there was a decline in the mean coin age. These factors collectively underscored the bearish sentiment in the market and suggested that ETH was likely not in an accumulation phase.

On August 23rd, there was a substantial outflow of ETH from exchanges, although there haven’t been many noteworthy outflows since that time.