Ethereum bearish despite The Merge, volatility in sight

The storm is over? – After stealthily dipping below the psychological $1,000 threshold, Ethereum is finding buyers. Ethereum records a nearly 35% rebound from the low found below $900. As the fundamental advances on the side of Ethereum with The Merge which could be deployed on Sepolia in Julyt, the course is struggling. A few weeks ago, we could legitimately think that the arrival of Proof of Stake on Ethereum could give a boost to the price, but this is not the case. For the moment, Ethereum has broken important levels and remains fragile as The Merge approaches. Summer is coming and it’s often a quiet period for institutions. Can Ethereum resume colors for its long-awaited update? Let’s look at the clues left by the graphs.

This analysis of the Ethereum price is brought to you in collaboration with the Coin Trading and its algorithmic trading solution finally accessible to individuals.

Ethereum Stuck Under 2018 ATH Weekly

Ethereum price against the dollar (1W)

Ethereum is currently under the 2018 ATH. A few months ago no one would have thought to see Ethereum under $1,000, but the market decides so decided. Since the break of $2,150 on a weekly basis, the price of Ethereum is in bearish momentum. The wick left on the week of June 13 is encouraging, but there is still no confirmation that would show an area of ​​consolidation on the price of Ethereum. You will have to wait at least one bullish engulfing candle or a double bottom confirmed.

In the event of a price rebound, the next resistance it is located at $1,350 which corresponds to the old support from last summer. It will absolutely be necessary to get rid of it in order to see Ethereum perform again. At the moment, ETH is still in bearish momentum, below the bearish trendline (Brown). Sellers have their hands on this crypto asset.

The momentum is bearish below bearish trendline. This trendline acts like a taut spring just waiting to come back into balance. Once it is broken in weekly view, we should be able to find some buyer flow on the asset created by Vitalik Buterin.

Ethereum daily: we must hold the support at $880

Ethereum went under the $1,000we must now try to develop a market low on these levels:

Ethereum will likely find resistance around $1,370 on a rally.
Ethereum price against the dollar (1D)

Ethereum is in downtrend on a daily basis. There is no sign of a trend reversal at the moment. In the event of a bounce, Ethereum should find resistance around the $1,370 with the confluence:

  • from first stop (0.382 Fibonacci retracement)
  • of the resistance corresponding to the 2018 ATH
  • of the bearish trendline

That’s a lot of hurdles for buyers who are going to have to show some strength to get past these resistors.

the momentum is he trying a break in the downtrend. A trend that has been present since the end of March. It might give a littleenergy for a rebound near $1,370. If the momentum fails, there is a good chance of seeing Ethereum back under the $1,000. It will then be necessary to defend the low found on June 18 so as not to slide towards the bracket at $500.

Possible short-term rebound for Ethereum?

A bounce of greater magnitude could occur if the price exceeds the downward trendline:

Ethereum could rebound towards $1,450 or even $1,750.
Ethereum price against the dollar (1H)

The course had drawn a bearish right triangle and its break initiated a fall of almost 50%. The price is currently in contact with the trendline, if it gives way, it could lead to a bounce. If the course is still as bearishthe rebound should not exceed $1,450. In the event of a larger bounce, it is not impossible to see the price at the resistance level at $1,750.

The momentum could again block against the trendline. This serves as resistanceit will have to be crossed so that the buyers can override the sellers.

Ethereum remains fragile against Bitcoin

Ethereum is fragile against Bitcoin, a return to support 2 would hurt investors.
Price of Ethereum against Bitcoin (1W)

On a weekly scale, Ethereum has broke a support significant (S1). It is currently stabilizing just below the support that has become resistance. There are now two scenarios:

  • Bullish : this corresponds to a recovery of the support. This would be very interesting for Ethereum buyers. Recovery of this support could lead to the ETH/BTC pair to resume a bullish momentum weekly.
  • Bearish : the scenario of a bearmarket with an Ethereum that would continue to fall in underperforming Bitcoin. When looking at the chart objectively, this is the scenario that remains most likely after the recent drop.

The momentum of the ETH/BTC pair is bearish and below the bearish trendline. The momentum has to come out of this bearish momentum to find buyer flow.

Ethereum’s perpetual contract on Binance

Derivative markets allow you to know the behaviours market players. If they are optimistic, they will tend to long (bet higher). Conversely, actors will tend to shortser the market (betting down) if they are pessimistic about the market. let’s look at it Binance contract who is the one who generates the most volume :

There are a lot of open positions on this contract.
Binance Perpetual Contract on Ethereum (1D)

According to the funding ratethe actors are not not one-way speculation. Indeed, when the funding is very high, the players are largely buying with leverage. Conversely, when the funding is negative, the players are betting lower. Here, the funding rate is slightly positivebut it remains at one correct level.

Open interest, which describes the number of open positions, remains very high despite the recent drop. The price fell by 75% since the beginning of April, but the number of positions continues to increase (+60%). This metric indicates two possibilities:

  • Players continue to want to find the low with leverage. There is then a strong chance of keep falling (to liquidate their positions).
  • Most of them are shorts. In this case, we could know a been similar to that experienced in 2021.

the long/short ratio shows a level of balance which is rarely found and usually leads to rebounds. There is currently as many open positions oriented towards the purchase (long) as open positions oriented towards the sale (short). This metric is based on the quantity of positionsnot the size of the positions.

Ethereum has fallen very sharply in recent weeks. In the space of two weeks, the course ofEthereum lost 50%. The price is currently very volatile and this is likely to continue given the number of positions on the derivatives markets, which continues to increase. Ethereum is struggling against Bitcoin, we would have to resume the support mentioned in the article to think that the fall is behind us. At the moment, Ethereum price is bearish and it will take time to change that. Buyers will have to show up to prevent the price of Ethereum from settling permanently below the psychological threshold of $1,000.

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