Ethereum’s Price Correction
After a significant surge last week, Ethereum’s price has encountered a substantial obstacle and is currently undergoing a correction. Traders are now wondering if a reversal is on the horizon.
Ethereum Price Analysis: The Daily Chart
On the daily chart, Ethereum’s price has been very bullish in the last quarter of 2023, with a notable increase of over $1,000. However, the price was rejected at the $2,700 resistance zone, leading to a correction towards the $2,400 area. Despite this correction, the Relative Strength Index (RSI) still indicates bullish momentum and suggests that the price will continue its uptrend once the correction is completed.
The 4-Hour Chart
An analysis of the 4-hour chart reveals that Ethereum’s price has formed a double-top pattern at the $2,700 resistance level. Additionally, the RSI indicates that the asset is overbought in this timeframe. Currently, the price is forming lower highs and lows, potentially targeting the $2,400 level in the short term. However, it is likely that this level will hold and initiate a rebound back towards $2,700 due to the overall bullish market structure.
Ethereum Open Interest
In terms of sentiment analysis, it is important to consider Ethereum’s derivatives market. While the price continues its bullish trend, there are concerning signs emerging from this market. The Taker Buy Sell Ratio, which evaluates futures market sentiment, has never recovered above one during the recent uptrend. Although the price has been rallying higher, the ratio is currently dropping rapidly and making new lows. This suggests potential aggressive selling pressure by futures traders and could lead to a significant decline in price.
Hot Take: Ethereum’s Correction Signals Potential Reversal
Ethereum’s recent correction following a surge in price has sparked speculation about a possible reversal. Technical analysis indicates that the price is currently undergoing a correction towards the $2,400 level, but the overall market structure remains bullish. However, sentiment analysis raises concerns about the derivatives market and the potential for aggressive selling pressure. Traders should closely monitor these factors to determine if a bearish reversal is on the horizon for Ethereum.
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