Ethereum rebounded after suffering a drop of around -4% at the start of the week. Let’s see the future prospects for ETH.
Status of Ethereum (ETH)
At the start of the week, the price of Ethereum crashed around $1,530. However, the correction of this movement was not long in coming. Indeed, the ETH price finds itself just below $1,600, a level which has already demonstrated its relevance in the past. Ethereum now forms a double top, which has just been broken. This chart pattern suggests a possible decline to come. The ETH price is below its 50 and 200 day moving averages, which form a “death cross”. This suggests that its uptrend is about to reverse. The daily RSI and MACD indicate continued selling pressure. However, it is interesting to highlight the formation of a bullish divergence. Once confirmed, this phenomenon is intended to be encouraging for a real bullish reversal.
The current technical analysis was carried out in collaboration with Elie FT, a passionate investor and trader in the cryptocurrency market. Currently a trainer at Family Trading, a community of thousands of own-account traders active since 2017. You will find Lives, educational content and mutual assistance around financial markets in a professional and warm atmosphere.
Focus on derivatives (ETHUSDT)
The latest increases in Ethereum have visibly caused a drop in its open interest. In theory, this suggests that sellers are capitulating to buyers. In terms of liquidations, we can see that the most significant took place during the decline at the start of the week, causing strong exits from long positions.
It is interesting to view the Heat Map of Liquidations on ETH available on coinglass. Indeed, we can see that the price of Ethereum is gradually approaching a high liquidity zone of around $1,650. Upon contact with the latter, this could trigger a large number of deferred orders and/or forced liquidation, which can naturally increase the volatility of ETH at this level.
Hypotheses for the price of Ethereum (ETH)
. If the price of Ethereum returns above $1,650, we could anticipate a bullish continuation to the level of $1,750-1,800. The next resistance to consider at this point will be the $1,900 threshold.
. If the price of Ethereum rejects $1,600, we could envisage a bearish continuation up to $1,500. Unfortunately, if this level does not hold, this could lead it, more or less quickly, towards the next support around $1,400.
Conclusion
Just like Bitcoin, the upward trend that Ethereum began at the start of the year is weakening. We must hope for a real return from buyers so as not to witness a real bearish reversal. Despite promising momentum, nothing is won. Thus, it will be important to carefully observe the price reaction on the different identifiable levels to confirm or not the different hypotheses made. Beware of potential “fake out” and “market squeeze” in each situation. Additionally, it should be remembered that these scenarios are based solely on technical analysis. The price of cryptocurrencies may change more or less quickly, depending on other more fundamental factors.
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