Ethereum’s price today is facing the stiffest resistance in recent weeks, just above the $1,700 level, and continuing to climb is no sure thing. The cryptocurrency’s price is currently sitting just over $1,590 on Wednesday after bouncing off some support at $1,449 last week and recovering marginally. This powerful economic recovery was admittedly short-lived, with the price being turned down from the $1,700 mark and then dropping back by 2.15%. ZKsync, one of Ethereum’s leading layer-2 scaling solutions, is under a substantial cloud of doubt following their recent chaotic hack. A hacker used a compromised admin wallet to mint 111 million unclaimed ZK tokens – valued at $5 million.
Ethereum Price Analysis
Ethereum’s price action shows that there is a hard battle against the psychological level at $1,700. After finding support near the $1,449 level, the first recovery retreated hard at the $1,700 level turning it into strong resistance. This rejection resulted in a nasty drop, reaffirming that there is huge selling pressure at this level.
The daily Relative Strength Index (RSI) adds credence to the bearish argument. It has fallen under the neutral mark of 50. Currently, it languishes below 40, indicating a build-up of bearish pressure. If this bullish momentum is to continue, the RSI needs to push through the neutral level.
If Ethereum fails to reclaim the $1,700 area, it could further tumble in price. Such a decline would bring it to retest the daily support barrier around $1,449 once more. A firm close below this level could lead to a further drop toward the key psychological $1,300 mark.
ZKsync Hack and its Impact
Formerly a high-flying Ethereum scaling solution, ZKsync’s recent hack threw more gas onto the Ethereum sentiment fire. As a result, the hacker was able to take control of the admin wallet and mint 111 million unclaimed ZK tokens — worth over $5 million. This security breach brings into question the security of layer-2 solutions and their effects on the overall Ethereum ecosystem.
The incident not only has the ability to erode confidence above Ethereum-based initiatives but may have broader implications, even causing further price implosions. Investors will be more wary of projects that heavily rely on layer-2 scaling solutions. This hesitation will only increase, especially if any security flaws are revealed.
The ZKsync hack is a cautionary tale for the blockchain industry on the need for strong security solutions. Projects should make security a higher priority and need to institute strict protocols to safeguard user funds and avoid future hacks.
Potential Scenarios
Ethereum’s price has two likely scenarios unfolding in short term. The first case is a bullish breakout above the $1,700 resistance area. If Ethereum can overcome this hurdle and sustain its momentum, it could target higher levels, potentially reaching the 200-day EMA at $1,95, a level it broke above and recovered 11% until the Saturday.
The second scenario is one of a gradual ongoing correction. Ethereum must clear $1,700 to start a strong upward move. Conversely, if it is unable to do this, the price could pull back to retest the daily support level at $1,449. Any move below this area might find further downside toward $1,300.
The RSI will undoubtedly be one of the most closely watched indicators over the next few days so stay tuned. An advance above the neutral threshold of 50 indicates a possible change in direction of movement. On the flip side, a further drop seals the bearish case.
