Ethereum (ETH) is struggling to get going on the higher time frame charts as the sellers are dominating. It’s not just the higher time frame, which ETH is struggling with, but also the daily chart. While both charts look hopeless, an analyst stated that ETH is undervalued.
ETH faces rejection twice at $1,800
An analyst who goes by the pseudonym Sjuul stated that Ethereum is struggling on the higher timeframes due to the presence of the sellers. After losing the support level at the accumulation zone, ETH has been struggling.
On the chart shown above, Ethereum has formed a classic double top pattern, a bearish reversal structure that often signals weakening buying strength. The price tested the $1,800 resistance level on two separate occasions but failed to break above it, indicating that sellers repeatedly stepped in at the same price area. This repeated rejection suggests the market lacks sufficient buying demand to overcome overhead resistance.
The inability to reclaim $1,800 has left Ethereum vulnerable to further downside, as traders continue to monitor whether the support below the pattern can hold. If ETH breaks beneath the double top’s neckline, the bearish pattern would be confirmed, increasing the likelihood of another leg lower. Conversely, a decisive move above $1,800 would invalidate the pattern and could shift momentum back in favor of the bulls.
Ethereum faces rejection at 50-day MA
The outlook is no better on the daily charts when the latest strip of trading action is considered. After losing the 50-day moving average, back in mid-May, ETH is revisiting this level after around 45 days. However, the sellers still are domiinating the market as ETH was not able to recover this level once again.
The repeated rejection at the 50-day moving average suggests that what was once a support level has now turned into resistance, a common sign of a prevailing downtrend. As long as Ethereum remains below this indicator, the short-term trend is likely to favor the bears, with every recovery attempt facing renewed selling pressure. A decisive close above the 50-day moving average would be needed to signal that buyers are regaining control, but until then, the technical outlook remains tilted to the downside.
Analyst states ETH is undervalued
Leon Waidman explains that “the economy running on the chain now outweighs the asset securing it”. This means that the total value of assets and applications operating on Ethereum has grown larger than the market value of ETH itself. Ethereum is secured by validators who stake ETH to validate transactions and protect the network, while decentralized applications, stablecoins, lending protocols, tokenized assets, and other DeFi services collectively make up the economic activity on the blockchain.
When the total value locked (TVL) exceeds Ethereum’s fully diluted market capitalization, it suggests that the value being supported by the network has become larger than the value of the asset providing its security.
This is a rare milestone because Ethereum’s fully diluted market capitalization is estimated at around $210 billion, while the total value locked across its ecosystem has climbed to roughly $260 billion. For the first time, the value of assets deployed in Ethereum’s smart contracts has surpassed the theoretical value of all ETH in circulation and yet to be issued. Even during the 2022 bear market, ETH’s valuation remained above the value locked on the network.
