Ethereum (ETH) Price Prediction: Will the Second-Largest Cryptocurrency by Market Cap Continue Its Reversal?

Ethereum was trading lower early Thursday, reversing a searing rally that made it the most successful large-cap coin over the week.

Ethereum (CRYPTO: ETH) was trading lower early Thursday, reversing a searing rally that made it the most successful large-cap coin over the week.

What Happened: The second-largest cryptocurrency by market capitalization fell below the $2,600 level on profit-taking, having reclaimed $2,700 on Wednesday. The trading volume dropped by 34% in the last 24 hours.

ETH, which has been a major underperformer this year, rose sharply on favorable macroeconomic developments, such as the U.S.-China tariff de-escalation and the softer-than-expected consumer inflation data.

The rally has pushed it to levels not seen since the closing days of February. The coin has rallied 32% over the week and 42% since the beginning of May, especially considering that ETH recorded five consecutive red months before this one.

The uptick dwarfed the returns of major altcoins such as XRP (CRYPTO: XRP) and Solana (CRYPTO: SOL), both of which gained a little over 13% in a week's time.

"Makes sense for ETH to test the support around $2,400 again after running hot and fast. A sweep and back up likely leads to a local range being formed around $2,400-$2,700. Still prefer longing on weakness in this move up. FLM to short on strength," said cryptocurrency trader and analyst Daan Crypto Trades.

See Also: Anthony Scaramucci Says Once Bitcoin Hits $500,000 It Will Be Considered An Asset Class Like Gold

Later Thursday, ETH fell further and broke below $2,400. At the time of writing, it was changing hands at $2,348.65, down 0.78% in the last 24 hours, according to data from Benzinga Pro.

At the same time, Bitcoin (CRYPTO: BTC) was trading at the $65,000 level, dropping 0.3% over the last 24 hours.

What's Next: If ETH falls further and breaks the $2,400 support, it could continue declining to test the next support at the $2,000 level.

On the other hand, if it manages to rise and break out of the resistance at the $2,700, it could continue rallying to test the next resistance at the $3,000 level.

The strong rally in ETH is likely to continue as long as the macroeconomic trends remain positive and there are no major setbacks in the cryptocurrency market.

Image Via Shutterstock/VPLAB