Ethereum: Why investors should look beyond ETH’s current formation

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Dis­claimer: The find­ings of the fol­low­ing analy­sis are the sole opin­ions of the writer and should not be con­sid­ered invest­ment advice

  • Long and short-term ETH hold­ers saw gains
  • If BTC’s bear­ish sen­ti­ment per­sists, ETH could find new sup­port at $1217.22 and $1166.83 

Ethereum [ETH] wit­nessed a drop just as it head­ed into the week­end. It lost the $1,300 psy­cho­log­i­cal lev­el after Bit­coin [BTC] strug­gled to trade above $17K. At press time, ETH was trad­ing at $1270.69 and could con­tin­ue on a down­trend through­out the week­end based on the tech­ni­cal analy­sis indi­ca­tors.

If the bear­ish momen­tum per­sists, ETH could find new sup­port lev­els at $1,217.22 and $1,166.83. 


Read Ethereum’s [ETH] price pre­dic­tion 2023–2024


ETH fails to break the $1306 resistance again: Will bears take full control?

Source: Trad­ingView

ETH has been oper­at­ing with­in the $1,239 – $1,378 range dur­ing Sep­tem­ber and Octo­ber. An upside break­out from the range led ETH to pump by over 20%, reach­ing a high of $1,682.11 in ear­ly Novem­ber. But the mar­ket crash forced a down­trend that led to mas­sive price cor­rec­tion the last time ETH attempt­ed a ral­ly.

At press time, ETH faced sig­nif­i­cant resis­tance at the 38.2% Fib lev­el, which also dou­bled as a bear­ish order block. Tech­ni­cal indi­ca­tors sug­gest­ed that ETH could drop fur­ther. The Rel­a­tive Strength Index (RSI) moved side­ways and rest­ed on the 50-neu­tral lev­el with a drop in mind. This showed that buy­ers’ exhaus­tion could give sell­ers more leverage. 

Addi­tion­al­ly, the On-Bal­ance Vol­ume (OBV) also moved side­ways after form­ing a gen­tle slope upwards. It showed a lack of sig­nif­i­cant trad­ing vol­umes to back buy­ing pres­sure. Thus, buy­ing pres­sure could be under­mined. There­fore, ETH could head down and set­tle on new sup­port lev­els at $1,217.22 and $1,166.83.

How­ev­er, an intra­day close above $1306.06 will inval­i­date the above bear­ish bias. In such a case, ETH could set sail north­wards despite numer­ous obsta­cles toward the 100% and 78.6% Fib pock­et levels. 

Short and long-term ETH holders saw profits, but ….

Source: San­ti­ment

Despite the recent bear­ish sen­ti­ment, ETH post­ed gains to its short and long-term hold­ers. For exam­ple, the 30-day Mar­ket Val­ue to Real­ized Val­ue (MVRV) was pos­i­tive from 29 Novem­ber. This showed that short-term ETH hold­ers made prof­its since the end of  November. 

Unfor­tu­nate­ly, ETH saw a neg­a­tive sen­ti­ment at the time of pub­li­ca­tion that could delay fur­ther uptrend momen­tum. Thus, sell­ing pres­sure may build over the week­end and ear­ly next week if BTC’s sen­ti­ment remains bearish. 

How­ev­er, if BTC regains $17K and main­tains upward momen­tum, ETH’s mar­ket struc­ture will have a clear bull­ish direc­tion. There­fore, ETH investors should be cau­tious and prefer­ably make a move if the mar­ket direc­tion is much clearer. 

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