Technical Analysis: Ethereum’s Price and Support Levels
Ethereum’s price has been on a decline recently after facing a strong resistance level. However, there are several support levels nearby that could potentially limit the downside.
The Daily Chart: Ascending Channel and Resistance Level
Looking at the daily chart, Ethereum has been forming an ascending channel over the past year. The price recently tested the upper boundary of the channel, which also coincided with a resistance level at $2,750. Unfortunately, it failed to break above this level and experienced a significant rejection. As a result, the market fell below the $2,400 support zone.
The Relative Strength Index (RSI) is currently below 50%, indicating a potential further decline towards the 200-day moving average around the $2,000 level.
The 4-Hour Chart: Consolidation and Breakout Potential
On the 4-hour timeframe, Ethereum is currently consolidating between the $2,100 and $2,400 levels. If there is a breakout to the upside, the higher boundary of the large channel would be the likely target.
However, if the $2,100 level breaks down, it could lead to a drop towards $2,000 or even lower. Considering the signals from the daily chart, a further downside seems more probable.
Sentiment Analysis: Ethereum Taker Buy Sell Ratio
Investors may be interested in understanding how futures market traders are behaving given Ethereum’s failure to surpass the $2,500 level.
The Taker Buy Sell Ratio chart shows the 100-day moving average of this metric. It measures the ratio of buyers’ aggressiveness compared to sellers’. A value above one indicates buyer dominance, while a value below one suggests aggressive selling pressure.
The chart reveals that the metric has not recovered above one and has been declining sharply in recent weeks. The ratio is approaching levels seen during the all-time high range in late 2021. This is a concerning sign, and if the trend continues, it could shift towards bearish sentiment.
Hot Take: Ethereum Faces Resistance and Potential Downside
Ethereum’s price has faced resistance at the $2,750 level and experienced a significant rejection. The charts indicate potential further downside towards the $2,000 level. Additionally, the Taker Buy Sell Ratio suggests a shift towards bearish sentiment in the futures market. Investors should closely monitor these levels and indicators to make informed decisions.
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