After reaching the $4,000 threshold, Ethereum began a 25% corrective phase. Let’s take a look at the future prospects for ETH.
Status of Ethereum (ETH)
After reaching a peak at $4,100, the price of Ethereum began a bearish movement, countering its last active bullish phase since $2,100. In fact, the price of Ethereum regained, on the morning of Wednesday, March 20, $3,050. It should be noted that this drop occurred after the Dencun update. Has the price of cryptocurrency already incorporated this news? What is certain is that the decline of Bitcoin has contributed to that of Ethereum. The support at $3,700 was not strong enough, as was the support at $3,500 and $3,200. However, we can observe that the price of Ethereum has rebounded from the 50% Fibonacci level, taken into account from $2,100. Thus, buying pressure seems to be identified at this level.
Ethereum currently sits just above its 50-day moving average. The structure remains bullish, but a passage of ETH below this threshold could sow doubt on this outlook. As for Ethereum’s bullish momentum, it is not surprising that it has been revised downward, given the direction taken by the 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 ETH/USDT contracts has seen a notable decline. This decrease was accompanied by a liquidation mainly on purchases and a reduction in the financing rate, suggesting a certain capitulation of buyers. It is crucial to mention that the reduction in the financing rate can be interpreted positively when it is considered excessively high. Effectively, this can signal a readjustment towards a healthier balance between the market and its underlying asset, thereby helping to reduce the selling pressure that could weigh on these contracts.
The heatmap of ETH/USDT’s one-month liquidations reveals that the cryptocurrency is sitting just above a strong liquidation zone located in a price range between $3,000 and $2,800. Above the current price, we can also observe an area around $4,100, corresponding to the last high reached by ETH. 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 $3,000, we could anticipate a bullish continuation up to the $3,600 level. The next resistance to consider, if the upward movement continues, would be $4,100. At this stage, this would represent an increase of more than +26%.
- If the price of Ethereum fails to stay above $3,000, we could envisage a return to $2,900 or even $2,800. The next support to take into account, if the bearish movement continues, would be around $2,700. At this stage, this would represent a drop close to -15%.
Conclusion
After peaking at $4,100, Ethereum underwent a significant bearish correction, despite a remarkable rebound to $3,050, momentum partly attributed to the influence of Bitcoin’s fluctuations. Although support at various levels has been compromised, the rebound seen at the 50% Fibonacci level demonstrates some resilience and potential buying pressure. Thus, the structure of the cryptocurrency remains bullish. 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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