After an increase of more than 20%, the price of Ethereum underwent a downward correction. Let's take a look at the future prospects for ETH.
Ethereum (ETH) price situation
After rising from $3,000 to $3,800 following the approval of Ethereum spot ETFs, the price of the cryptocurrency stabilized before experiencing downward pressure, bringing it back to $3,500. This drop was fueled by the slight decline in Bitcoin, which took the entire cryptocurrency market with it. Now, the cryptocurrency appears to be stabilizing, demonstrating renewed buyer interest. At the time of writing, one Ether is worth slightly over $3,500. Thus, it is below $3,800, corresponding to the control point taken into account since its last rebound.
The point of control (POC) refers to the price level with the highest trading volume over a given time period, thereby indicating a key area of support or resistance.
The next value area to consider is just below the Ethereum price, precisely below $3,000. This zone coincides with the support zone identified at the same price level.
Ethereum is holding above its 50-day and 200-day moving averages, which continues to support the idea that the cryptocurrency is in an uptrend. However, it should be noted that Ethereum's dynamics are being revised downwards, as evidenced by oscillators and the price of Ethereum itself.
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 in Ethereum-linked perpetual contracts has recently tracked the price of its underlying. Coupled with a still positive funding rate, this demonstrates majority buyer participation in Ethereum derivatives. However, it should be noted that, although positive, these rates have been revised slightly downwards, reflecting a slight capitulation on the part of buyers. This phenomenon could be explained by increasing selling pressure, but also by liquidations, particularly marked on the buyers' side.
The three-month ETH/USDT liquidation heatmap reveals that the liquidation zone at $3,700 was recently reached. It seems to have triggered buying interest which was not sustained, which allowed the continuation of the downward movement. Now the most significant liquidation zones are on either side of the current price. Above, we can note the $3,900 zone. Below, we can note the $3,000 zone. 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 crucial point of interest for investors.
Hypotheses for the price of Ethereum (ETH)
- If the price of Ethereum remains above $3,300, we could anticipate a bullish recovery up to $3,900, or even $4,000. The next resistance to consider would then be $4,100. If the bullish move continues, this could mark a new high at $4,500 and even reach Ethereum's ATH, just below $4,900. At this point, that would represent an increase of more than 37%.
- If the price of Ethereum fails to stay above $3,300, we could envisage a return to around $3,000. The next support to consider, if the bearish movement continues, would be in a price range between $2,800 and $2,700. At this point, that would represent a drop of around -13%.
Conclusion
After an initial rise followed by stabilization, the price of Ethereum came under downward pressure, partly due to a decline in the overall cryptocurrency market. Currently, the cryptocurrency is showing signs of stabilization with renewed interest from buyers. Although these fluctuations sow doubt about the future direction of Ethereum, its underlying trend remains bullish, which favors the idea of considering a possible rebound. However, it will be crucial to carefully observe the price reaction at different key levels to confirm or refute the current assumptions. 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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