As an experienced technical and sentiment analyst, I have closely observed Ethereum’s recent price action and market behavior. After a brief consolidation near the critical resistance level of $4K, Ethereum encountered increased selling pressure that led to a decline. The daily chart shows a notable rejection at this pivotal level, indicating strong selling interest and aggressive short positions around $4K.
Ethereum took a pause around the important $4K threshold before facing renewed selling force, causing it to drop. Nevertheless, a substantial support area looms in the vicinity, potentially halting any more significant declines.
Technical Analysis
By Shayan
The Daily Chart
Examining the intraday Ethereum chart more closely reveals that following a brief pause in its price action around the significant resistance point of $4,000, there was an increase in selling pressure, leading to a clear rejection of this level. This suggests that there is substantial selling demand at the previous major peak, underscoring the presence of sizeable short positions close to the pivotal $4,000 mark.
As a researcher studying market trends, I’ve identified a noteworthy area of potential support for the current price action. This zone includes the 100-day moving average, which stands at $3,430, and the 0.5 Fibonacci retracement level, located at $3,419. These key levels may help halt the bearish correction in the short term, serving as crucial support for prospective buyers.
The 4-Hour Chart
On the 4-hour chart, the price has been trading around $4K recently, forming a consolidation phase. This consolidation has shaped up as a head and shoulders pattern, which is often interpreted as a sign of waning bullish sentiment and growing supply. Such a pattern can foreshadow a short-term bearish reversal. However, the price has just dipped below the neckline of this formation, making a bearish outlook more likely.
An opposing trend between Ethereum’s price and its Relative Strength Index (RSI) may serve as an extra warning sign, indicating that sellers are in control, potentially casting doubt on Ethereum’s upcoming direction.
At present, the cost is hovering near a significant support figure of approximately $3,600. Should sellers succeed in pushing past this important threshold, it’s highly probable that the downward trend will persist.
Sentiment Analysis
By Shayan
Traders may find it worthwhile to monitor the actions of investors in the Ethereum futures market as the cryptocurrency’s price hovers around the $4,000 threshold.
The graph illustrates the seven-day rolling average of the Taker Buy Sell Ratio, evaluating the degree of buying and selling activity. A figure greater than one signifies stronger buyer presence, whereas a number less than one implies heightened seller pressure.
Based on the chart, the ratio has remained below 1 and has been dropping steeply over the past few days. This pattern indicates that a large number of Ethereum futures traders have been selling off their positions, be it for speculative reasons or to secure profits. The substantial decrease in this indicator serves as a bearish sign, implying that the ongoing price decline could persist if this trend continues.
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2024-06-10 18:44