Analysis

Can Ethereum bulls break out of the past two weeks’ slump

The $1700 area presented an attractive pocket of liquidity for Ethereum bears, but it was also a critical level for bulls to breach, and it was unclear which way ETH would go next.

Published

1 year ago

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Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

  • The lower timeframe price action showed the bears were heavily favored.
  • Ethereum was trading at a higher timeframe support zone, where recovery could be initiated.

Ethereum [ETH] has trended downward on the lower timeframe price charts in the past two weeks. Its recent attempts to reclaim the $1700 level were met with failure. The falling MVRV ratio suggested the downtrend was likely to continue.

Read Ethereum’s [ETH] Price Prediction 2023-24

The price action showed the structure was bearish across multiple timeframes from the daily to the 1-hour chart. ETH was within a higher timeframe area of interest where buyers would be interested, but it hasn’t materialized yet. Here’s what the prices can do in the coming week.

There is a strong chance Ethereum can descend to $1400 if it can’t bounce soon

Source: ETH/USDT on TradingView

The price action of the past two weeks indicated a robust bearish sentiment. The series of lower highs and lower lows have continued in the past four days, although the momentum slowed down. The 1-day chart showed that the $1625-$1680 was a demand zone, where the previous Ethereum rally reaching $2020 was initiated.

Hence a bullish structure break on the H4 chart would be the first step toward recovery. The RSI climbed toward neutral 50 to signal a shift in momentum. Yet the OBV did not ascend by a notable amount. This highlighted weak demand and a lack of volatility.

A move below $1620 and a retest of the $1620-$1650 region could offer an opportunity to short ETH. To the south, the $1520-$1550 region could serve as support. Another demand zone lower on the chart was at $1370-$1440.

Conviction was lacking in the futures market and bears have the advantage

Source: Coinalyze

The 1-hour chart from Coinalyze showed that the Open Interest did not fluctuate much in the past week. Ethereum saw a bounce from $1580 and $1680 but has sunk to the $1640 level once more. The OI has trended downward in the past three days alongside the decline in price to signal bearish sentiment was prevalent.

How much are 1, 10, or 100 ETH worth today?

The spot CVD had been in a downtrend till 23 August but has flattened its path since then. This showed that neither buyers nor sellers had the upper hand. The funding rate was positive and suggested more traders were long than short. Yet, this does not guarantee a bounce by itself.

Aggressive ETH bears can wait for a move below $1620 or a move to the liquidity pocket at $1700-$1720 and a rejection to enter short positions.

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