Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
The Ethereum bulls failed to mount a rally after sellers forced a major correction. The higher timeframes support a bullish thesis, but the price could drop again in the coming days.
Ethereum [ETH] saw huge volatility last weekend. On Monday, July 10, ETH was trading at $1850. In the early hours of Friday, ETH was priced at $1993 and quickly plummeted a few hours after that.
Read Ethereum’s [ETH] Price Forecast 2023-24
Ethereum’s longer-term bias remained bullish. But on the lower timeframe charts, the breakout past the three-week range (highlighted in yellow) of $1840-$1930 had almost completely recovered. That did not suit the buyers.
If it looks like a breakout and has volume like a breakout, then it’s probably…not a breakout?
The Ethereum market structure was bullish on the 4-hour chart. As mentioned earlier, the price action on the daily chart is also in favor of the bulls. The CMF showed a significant flow of capital to the market and the OBV also posted gains in recent days.
The RSI has fallen back to the neutral 50 but could soon rebound. Despite what the indicators say, if ETH was really bullish, the break to $2000 makes no sense to return to the previous range formation.
The weekend saw volatility and trading volume fall, but prices below $1950 showed that bulls lacked conviction and bears are much stronger than it appears. Therefore, traders can wait for a drop below $1895-$1915 to take short trades. Alternatively, a move back above $1950 would begin to show bullish intent, but buyers should exercise caution.
How much is 1, 10 or 100 ETH worth today?
Open Interest leveled off as speculators sidelined over the weekend
Some weekends see heightened volatility as the low volume in the order books means driving up prices is easier for whales. This weekend, price action hovered in the $1925-$1945 region, which were 1% apart.
Due to the lack of a strong trend, speculators in the futures market did not commit much capital and Open Interest remained flat. Rather, it experienced a sharp drop as Ethereum regained its breakout. The spot CVD was in a downward trend, showing short-term seller dominance. Financing rates remained positive.
This post Why Ethereum Bulls Should Be Cautious
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