After marking a peak, Ethereum is under increasingly threatening selling pressure. Let’s take a look at the future prospects for ETH.
Ethereum (ETH) price situation
After peaking at $3,950 following the approval of Ethereum spot ETFs, the price of Ethereum came under selling pressure which naturally pushed the price of the cryptocurrency down. This decline was fueled by the decline in Bitcoin, which took the entire crypto market with it. Thus, Ethereum is in a short-term downtrend. Nonetheless, it appears to have attracted buying interest as it reached $3,250, which allowed it to hold above $3,300, a price level highlighted in the June 12 analysis. This therefore leaves hope for a rebound to counter this selling force.
Ethereum now sits just below its 50-day moving average. This is not reassuring about the medium/long term structure of crypto. However, we can be reassured by the fact that it remains above its 200-day moving average. In terms of the dynamics of the Ethereum price, it is not surprising that it continues to fall, as evidenced by the oscillators and the price of Ethereum itself. While this is a timely signal in an uptrend, it can prove worrisome as this decline deepens.
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 (ETH/USDT)
Open interest in perpetual contracts on Ethereum appears to have followed the trajectory of the crypto price. This thus demonstrates an exit from position on the part of speculators as the price of ETH falls. This phenomenon can be explained by a capitulation of buyers, subtly illustrated by the latest liquidations with a majority of buyers. Coupled with a continued decline in funding rates, this demonstrates increasing selling pressure on ETH/USDT contracts. Naturally, this is not intended to be convincing from a buyer’s point of view.
The three-month ETH/USDT liquidation heatmap reveals that the contact of the last two liquidation zones with Ethereum price did not trigger sustained buying interest. Now, the most significant liquidation zones in recent months are above the current ETH price. We can first highlight the area just below $3,700, then higher up the area of $3,900 which is still apparent. Below the current price, we can note the area just below $3,100. It seems that the latter extends up to $2,800, where the zone seems most marked. 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 $3,250, we could anticipate a bullish recovery up to $3,500, or even $3,800. The next resistance to consider would then be the $4,000 – $4,100 area. If the bullish move continues, this could mark a new high at $4,500, opening the door to reaching Ethereum’s ATH. At this point, that would represent an increase of more than 32%.
- If the price of Ethereum fails to stay above $3,250, we could envisage a return to around $3,000. The next support to consider, if the bearish movement continues, would be in the price range between $2,900 and $2,800. Further down, we can note the support at $2,700. At this point, that would represent a drop of around 20%.
Conclusion
Ethereum is currently going through a declining phase influenced by the fall of the crypto market. Despite this selling pressure, key support made it possible to maintain a certain price level, giving hope for a potential rebound. However, the situation remains uncertain, as the bearish momentum of ETH is persistent, this could become worrying if this trend continues. 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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Family Trading
Family Trading is a Community of own-account traders active since 2017 offering Lives, educational content and mutual assistance around the financial markets including that of cryptocurrencies with Elie FT, a passionate investor and trader on the crypto market.
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