ETH Price Hits December 2023 Levels and Risks Losing $2,000 Support

The native asset of the network created by Vitalik Buterin has experienced significant weakness lately amid the rise of competing smart contract platforms like Solana (SOL), BNB Chain (BNB), and Cardano (ADA).

In the past 24 hours, ETH has dropped by 12.9% and currently stands at $2,070. This dangerous approach to a key psychological support (the $2,000 level) is evidence of the network’s ongoing challenges to stay competitive.

The Ethereum blockchain has struggled to solve its scaling issues, although it remains the most decentralized alternative of all.

The upcoming Pectra upgrade, which should be implemented this month, should supposedly help the blockchain solve some of these hurdles by introducing changes that further entice developers to run their decentralized apps (dApps) on the Ethereum Virtual Machine (EVM).

Negative Momentum Picks Up for ETH – How Low Can It Go?

The daily chart shows the market’s reluctance to push ETH above the $4,000 level multiple times, as the network has not improved technically to the point that it can withstand the number of suitable competitors that have been emerging lately.

Meanwhile, this year’s sharp drop managed to evaporate all of ETH’s post-election gains and is pushing the price of this digital asset to its lowest level since December 2023.

Yesterday’s drop below the $2,100 level has increased the risk of a move below the $2,000 psychological support. If this happens, Ethereum could slide to $1,900 first and $1,500 afterward if the selling pressure accelerates.

Market sentiment slightly improved after President Trump mentioned the assets that could make it to a strategic reserve – a list that included ETH. However, the Fear and Greed Index is still standing at its lowest level since this gauge was launched by CoinMarketCap in June 2023.

Momentum indicators are also favoring further drops, as the Relative Strength Index (RSI) moved below the signal line, while the MACD’s histogram shows that negative momentum is accelerating.

Is Pectra Going to Solve Ethereum Issues?

One of the key improvements that Pectra introduces is an increase in the number of blobs per block that can be added. This is a technical upgrade that should supposedly help layer-two protocols like Arbitrum and Optimism offer faster transaction execution speeds and lower fees.

However, Ethereum’s scaling issues resulted in the network missing out on top trends like the adoption of meme coins, which propelled the Solana ecosystem to its current levels amid the latter’s more adequate infrastructure to handle the resulting transaction volumes.

Meanwhile, although the Ethereum decentralized finance (DeFi) ecosystem is still the largest in the crypto space in terms of total value locked (TVL) and stablecoin balance, Solana is attracting capital at a faster rate and could, in a few years, threaten Ethereum’s long-standing dominance in this segment.

ETH Rejects Move Above Key Resistance in Hourly Chart

The hourly chart shows that ETH bounced right after hitting the $2,000 mark, as a significant number of spot orders may have been set to buy once the token hit this threshold.

Positive momentum has picked up in the past few hours, but the $2,100 level seems to be acting as resistance and multiple attempts to push the price above this level have been rejected.

Although the Relative Strength Index (RSI) has sent a buy signal, bulls would need to recapture this important level to reverse the downtrend. The path of least resistance at this point is downwards, while a short position offers the highest risk-reward ratio.

Setting a stop-loss above the $2,110 mark and an exit target at the $2,000 level would result in an RR ratio of 1.7. An RSI bearish crossover would confirm a bearish short-term outlook for ETH during the American session.