As a seasoned crypto investor with a deep understanding of the Ethereum market, I’ve closely monitored its recent price action and analyzed both the technical and sentiment aspects to form an informed opinion.
After a strong push up towards the $4000 mark, Ethereum‘s native token has faced growing selling forces, causing it to take a small step back for consolidation.
As a crypto investor, I anticipate the price to oscillate between a narrow band with heightened swings before making a substantial leap forward.
Technical Analysis
By Shayan
The Daily Chart
As a crypto investor, I’ve noticed that Ethereum displayed renewed interest and purchasing power around the crucial $3K support level on the daily chart. This coincides with the 0.5 Fibonacci retracement level at $3,133 and the 0.618 Fibonacci retracement level at $2,906. The buying pressure generated a significant price increase, causing many short positions to be liquidated as Ethereum approached the formidable $4K resistance zone.
As a researcher studying market trends, I’ve noticed that the proximity of substantial supply to this pivotal area has resulted in heightened sales pressure. This, in turn, has led to increased market volatility and a slight consolidation. However, if we manage to break decisively above this critical resistance level, it could potentially trigger a rally towards the next resistance at approximately $4.5K.
Despite this, the current price action indicates the likelihood of a temporary consolidation before the next major move. In this scenario, the 100-day moving average at $3.3K will serve as the primary defense line for buyers in the short term.
The 4-Hour Chart
As an analyst, I closely examine Ethereum’s price action on the 4-hour chart, observing its recent bullish surge where the price jumped by a substantial 26%, breaking through various resistance levels. However, upon approaching the pivotal $4K resistance zone, the asset underwent heightened volatility due to a significant liquidation event, highlighting the ongoing struggle between buyers and sellers in this key area.
At present, Ethereum (ETH) is trading within a narrow band, with the resistance lying at $4.1K and the support zone encompassing the $3.4K (0.5 Fib level) and $3.2K (0.618 Fib level).
As an analyst, I believe that if the buying pressure manages to push the price above the $4.1K resistance level and sustains the bullish momentum, we could be looking at a robust uptrend in the intermediate term. This trend might even lead us to a new all-time high. However, it’s essential to keep in mind that a phase of sideways movement with increased volatility is likely to occur before the price makes its next significant move.
Sentiment Analysis
By Shayan
Ethereum’s price behavior over the past few years has been significantly influenced by the continuous futures market. By examining data from this market, we can gain useful perspectives on potential future price trends. This graph displays Ethereum’s price in conjunction with Funding Rates, Aggregate Liquidations, and Open Interest figures.
The graph showcases a substantial rise in open interest, mirroring a marked upward trend in ETH‘s price and favorable funding rates, reaching their peak since April 2023. This spike in open interest signifies heightened action within the perpetual futures market, as more traders engage in bold position-taking. This escalated activity is believed to significantly contribute to the recent sharp price hike.
Despite holding psychological importance and offering potential for supply, the $4K resistance level causes heightened volatility due to its significance and potential for supply. This instability has caused numerous liquidations of both long and short positions, as evidenced by the accumulated liquidation data. Nevertheless, the general market outlook remains optimistic, with investors anticipating the positive trend to persist.
While the market sentiment is bullish, the price may enter a phase of elevated volatility and sideways consolidation before making its next big move. This temporary consolidation would allow the market to absorb recent gains and set the stage for a potential continuation of the bullish trend.
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2024-05-25 17:50