Ethereum is regaining strength after a drop bringing it below $3,000. Let's take a look at the future prospects for ETH.
Status of Ethereum (ETH)
After peaking slightly above $4,000, Ethereum price suffered a decline, taking it back to $3,000. It is at this price level that the cryptocurrency formed a range between the latter and $3,700. Unfortunately, this range was broken from below, causing Ethereum to fall all the way to $2,865. As a result, its price appears to be forming a short-term downward trend. Nevertheless, at the time of writing this article, one Ether is worth almost $3,250. Thus, this demonstrates a buying force ready to counter this new bearish dynamic. Interestingly, Ethereum price is on the verge of rejecting or regaining its old support at $3,300.
Regardless, Ethereum's underlying trend still remains bullish. However, a return of Ethereum above its 50-day moving average would be more reassuring, as would a return of bullish momentum, which would rule out the idea of a potential deeper reversal.
The current technical analysis was carried out in collaboration with Elie FT, a passionate investor and trader in the cryptocurrency market. Today trainer at Family Tradinga community of thousands of own-account traders active since 2017. You will find Lives, educational content and mutual assistance around the financial markets in a professional and warm atmosphere.
Focus on derivatives (ETHUSDT)
Open interest on ETH/USDT contracts declined by over 29% before stabilizing. This balance took place in parallel with insignificant liquidations and a subtle increase in its underlying. As for financing rates, we can observe that they oscillate between positive and negative. This indicates that ETH/USDT contracts are aligned with the true price of Ethereum. Thus, all of these elements demonstrate a balance between buyers and sellers on ETH/USDT perpetual contracts.
The heatmap for the past month reveals that ETH/USDT contracts have crossed a notable liquidation zone, located between $2,300 and $2,200. It appears that buying interest persists, suggesting a continuation of the movement. Currently, the closest and most significant liquidation zone is above the current price, precisely around $3,500. Further up, there is an area at $3,800 and at the top, one at $4,100. To identify the notable area below, it will be necessary to explore further. In particular, we can observe a liquidation zone between $2,800 and $2,700. Price approaching these levels could result in a massive triggering of orders, increasing the risk of a period of heightened volatility for Ethereum. These areas therefore represent a potentially crucial point of interest for investors.
Hypotheses for the price of Ethereum (ETH)
If the price of Ethereum remains above $2,865, we could anticipate a return to $3,700. The next resistance to take into account, if the bullish movement continues, would be around $4,000. At this stage, this would represent an increase of more than +25%.
If the Ethereum price fails to stay above $2,865, we could envisage a return to around $2,700. The next support to consider, if the bearish movement continues, would be in a price range between $2,400 and $2,500. At this point, that would represent a drop close to -26%.
Conclusion
Despite recent declines, the resumption of higher price levels indicates sustained demand for Ethereum. The cryptocurrency's ability to stabilize and regain its previous supports will be crucial in demonstrating its resilience in the face of market fluctuations. Thus, it will be crucial to carefully observe the price reaction at different key levels to confirm or refute the current hypotheses. It is also important to remain vigilant against potential “fake outs” and “market squeezes” in each scenario. Finally, let us remember that these analyzes are based solely on technical criteria and that the price of cryptocurrencies can also evolve quickly depending on other more fundamental factors.
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