Ethereum short-term gains wiped out: Can bulls prevent further plunge

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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.

  • ETH’s weak fun­da­men­tals could delay imme­di­ate price reversal.
  • Short-term Ethereum hold­ers’ prof­its could be cut to size. 

Ethereum [ETH] dropped below its $1,600 mark after Bit­coin [BTC] lost the $23k zone. BTC sharply declined on 24 Jan­u­ary, mov­ing below $22.5k and pulling down ETH to $1,518. 

At press time, ETH strug­gled to break above $1,560 as BTC hov­ered below the $22,800 lev­el. There­fore, BTC’s loss of trac­tion and veloc­i­ty could force ETH into a short-term range before bulls attempt­ed to tar­get the green zone. 

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

ETH is stuck in the $1,540 – $1,560 range: Is a break above likely?

Source: ETH/USDT on TradingView

ETH front­ed an extra ral­ly around 14 Jan­u­ary, despite signs of slow­ing momen­tum. The price action carved a ris­ing chan­nel (yel­low) in the same period. 

The alt­coin broke below the chan­nel but found steady sup­port at $1,511. The ensu­ing recov­ery faced rejec­tion at $1,678, fol­lowed by a slight con­sol­i­da­tion before a major drop on Tues­day to the $1,500 region. 

On the 12-hour chart, ETH’s Rel­a­tive Strength Index (RSI) declined and was 52, show­ing a mild bull­ish momen­tum that was close to a neu­tral mar­ket struc­ture. Sim­i­lar­ly, the On-Bal­ance Vol­ume (OBV) declined, under­min­ing a strong uptrend momen­tum for the King of the alt­coin market. 

There­fore, ETH could fluc­tu­ate in the $1,540 – $1,560 range in the short term before attempt­ing a retest of the $1,600 zone in the next cou­ple of days/weeks. In addi­tion, a move to the $1,700 zone could be pos­si­ble if BTC moves beyond $23K, espe­cial­ly if next week’s FOMC announce­ment trig­gers the mar­kets positively. 

How­ev­er, a drop below $1,511 would inval­i­date the above bias. Such a plunge could see ETH set­tle at $1,471.

ETH saw a short-term accumulation, while gains declined by over 10%

Source: San­ti­ment

Is your port­fo­lio green? Check out the ETH Prof­it Calculator

Accord­ing to San­ti­ment, ETH’s Exchange Flow Bal­ance was neg­a­tive at press time. It shows more ETH flowed out than into the exchanges, indi­cat­ing that a short-term accu­mu­la­tion occurred at the time of publication. 

How­ev­er, the stag­nant active address­es in the past 24 hours show that trad­ing vol­ume remained unchanged, under­min­ing a strong price rever­sal. There­fore, short-term accu­mu­la­tion and stag­nant trad­ing vol­ume could force ETH into a price con­sol­i­da­tion with­in the $1,540 – $1,560 range in the next few hours. 

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