Ethereum Finds Support at Critical Level
After being rejected from the 100-day moving average, Ethereum experienced a rapid decline but found support at the critical level of the 61.8% Fibonacci retracement. This level also coincides with the previous major swing low at $1529, serving as a last line of defense for the bulls. A breach below this point could trigger a rapid market cascade.
Daily Chart Analysis
Examining the daily chart, Ethereum’s trajectory turned highly bearish after the rejection from the 100-day moving average. It completed a pullback and landed at the 61.8% Fibonacci threshold where it found support. The recent rebound signals a potential bullish shift, but this scenario will only materialize if demand substantially increases, leading to larger bullish candles. The viability of this potential reversal depends on buyer dominance in the market.
4-Hour Chart Analysis
Analyzing the 4-hour chart, Ethereum is in a period of sideways consolidation marked by a descending wedge pattern. The consolidation range is confined by the $1.5K support and $1.7K resistance levels. While there was a recent downward movement that touched the lower threshold of the wedge, the price found support and rebounded slightly. However, for a true bullish reversal, there needs to be a notable increase in buying pressure and buyer dominance in the market.
Closely monitoring price action in the coming days is crucial as mid-term volatility is expected to rise significantly, shaping the market’s direction.
Intriguing Futures Market Development
Despite Ethereum’s recent downward trend, an intriguing development in the futures market suggests a notable bullish sentiment. The taker buy-sell ratio, which evaluates sentiment by gauging aggressive market orders, has experienced a rapid surge. This indicates that market participants view the price depreciation as an opportunity to accumulate and invest in Ethereum. If this metric continues to rise above 1, it could pave the way for a bullish market reversal, with the price potentially surpassing $2K in the coming months.
This shift in sentiment suggests that traders and investors find the current market conditions attractive for long positions. Monitoring this metric can provide valuable insights into Ethereum’s future price movements and potential opportunities for traders.
Hot Take: Ethereum’s Recovery Depends on Buyer Dominance
Ethereum’s recent decline and subsequent rebound have left its future uncertain. The critical support level at $1529 is crucial for the bulls to hold, as a breach below could lead to a cascading market decline. Technical analysis shows potential for a bullish reversal, but it relies on increased demand and buyer dominance in the market.
On-chain analysis reveals an intriguing development in the futures market, with the taker buy-sell ratio indicating growing bullish sentiment. Traders and investors are seeing the price depreciation as an opportunity to accumulate Ethereum. However, it is important to closely monitor price action and the taker buy-sell ratio to make informed trading decisions in this volatile market.
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