After a period of consolidation, Ethereum has experienced a significant drop in price, plunging 10% in recent days. This downward movement has raised concerns about how low ETH can go. Let’s take a closer look at the technical analysis and sentiment surrounding Ethereum’s price.
On the daily chart, Ethereum’s price has fallen below the crucial $1,750 level and the key 200-day moving average, signaling a bearish phase. Currently, the $1,650 support level is holding the price, but the market structure has shifted bearish, suggesting a potential retest of the $1,400 level in the coming weeks.
Examining the 4-hour timeframe, we can see that Ethereum broke below a large descending channel a few days ago. While the price found support at the $1,650 level, indicating a potential short-term consolidation, the recent price action suggests that lower prices are still likely.
The sudden drop in Ethereum’s price can be attributed to futures market liquidations. Open Interest, which measures the total number of open positions in perpetual futures markets, experienced a sharp decrease during the recent decline. This indicates that the market went through a long liquidation cascade, leading to increased volatility.
However, the reduction in Open Interest suggests that the market may stabilize in the short term, with fewer leveraged positions open. This could result in a more stable price action for Ethereum.
Ethereum’s price has taken a hit, dropping 10% and raising concerns about how low it can go. Technical analysis indicates a bearish phase, with potential support levels at $1,650 and $1,400. The recent decline was accompanied by a decrease in Open Interest, suggesting a reduction in leveraged positions and the possibility of more stable price action in the short term.
It’s important to note that cryptocurrency markets are highly volatile, and price movements can change rapidly. Traders and investors should closely monitor the market and consider multiple factors when making trading decisions.
Disclaimer: This analysis is for informational purposes only and should not be considered as financial advice. Trading cryptocurrencies carries a high level of risk and may not be suitable for all investors.