As the sun rose on the global crypto market, Ethereum, the world’s second-largest cryptocurrency by market capitalization, was in an upward correction mode. After a period of bearish rally, Ethereum has entered a correction phase, with its price inching towards the $1,900 mark. As Ethereum faces a market correction, the focus is on the bulls’ ability to avoid further price declines. This phase could set the stage for Ethereum to break the $2,000 barrier.
Traders are bullish on Ethereum
CryptoQuant data reveals a correlation between Ethereum’s price movements and its trading volumes on decentralized exchanges (DEXs). Since January, there has been an increase in ETH transactions on DEX platforms. In March, when the SEC sanctioned centralized exchanges, DEX trading volumes peaked, coinciding with a rise in the price of ETH.
However, DEX volumes have since fallen, which could indicate a downtrend. Although there is a correlation, it does not imply direct causation, since other factors also influence the price of ETH.
Despite various influences, traders maintain a positive stance on ETH, as evidenced by the decreasing ratio between call and put options. This ratio, a measure of options trading activity, signifies bullish market sentiment when it declines.
Compare the number of put options, which are bearish bets, with call options, which are bullish bets. A lower put-to-call ratio suggests that fewer traders are betting against ETH, indicating a more bullish market outlook.
Another factor contributing to traders’ bullish behavior could be declining implied volatility. A drop in implied volatility suggests that traders expect less market uncertainty and price fluctuations, which is often taken as a sign of reduced risk and a more stable market.
What’s next after $1,900?
The extended wick on the Ethereum candlestick indicates that buyers bought heavily near the $1,800 dip. The ETH price has been on a notable rise and is currently trying to break above the EMA100 on the 4-hour price chart. However, the bulls are strongly advocating a rise, as a break above $1,900 will see a spike sell-off short. At time of writing, ETH price is trading at $1,871, up more than 0.4% from yesterday’s rate.
The flattened moving averages and the RSI near the midline suggest a balance between supply and demand. If the ETH price breaks above $1927, the bulls will again induce buying pressure to send the price to $1975 where the bears could put up a strong fight.
On the other hand, a severe recession could be on the horizon if ETH price fails to sustain momentum above the critical $1,820 support line. A drop below this level will strengthen the confidence of short position holders, and ETH price could touch the lower level near $1,650-$1,700.
This post Ethereum Triggers Correction Towards $1,900 – Will Bulls Support ETH Price Further?
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