Ethereum’s price has been experiencing a gradual decline in recent weeks, facing rejection once again at the psychological resistance level of $2,000. However, there are a couple of key factors to watch for a potential recovery in the short term.
Technical Analysis:
On the daily chart, bearish price action has been observed, with the 50-day moving average being broken to the downside around the $1,900 mark. The market is likely to target the 200-day moving average at around $1,800 and the $1,750 support level in the coming days. However, there is a strong possibility of a rebound from these support levels, leading to another rally towards the $2,000 mark and potentially even higher.
Looking at the 4-hour chart, the price has failed to hold above the $1,930 level and is currently testing the $1,830 support zone. If this support holds, there is a high likelihood of a rally towards the $2,000 level once again, with a potential breakthrough. On the other hand, a breakdown of the $1,830 level could result in further decline towards the $1,750 level.
Sentiment Analysis:
Analyzing the futures market sentiment can provide valuable insights in a situation where Ethereum’s price has been oscillating within a tight range. The taker buy-sell ratio, which indicates the aggressiveness of long and short traders, has been consistently dropping below 1. This suggests a lack of intent to recover and indicates selling pressure in the futures market, potentially offsetting spot market demand and leading to range-bound price action. Investors should keep an eye on the taker buy-sell ratio rising above 1, as this could potentially result in a new higher high in the short term.
In conclusion, while Ethereum’s price has been facing resistance at the $2,000 level, there are indicators that suggest a potential recovery in the short term. Monitoring the price action around key support levels and the taker buy-sell ratio in the futures market can provide valuable insights for investors.
