Ethereum Price Analysis: ETH Likely To Dip Before $3,000 Revisit

Ethereum (ETH) price shows signs of exhaustion on the four-hour chart as it retests the daily imbalance. Investors can expect ETH to trigger a short-term correction before the uptrend could resume. This pullback could be a much-needed opportunity for sidelined buyers.

Ethereum Price Eyes Correction

Ethereum price has shot up 30% from Monday’s low of $2,086 and could have set up a local top at $2,724. Interestingly, the swing high created on Thursday’s trading session was inside the $2,695 to $2,855 imbalance on the daily time frame. Usually, imbalances like these often lead to reversals, albeit short-term. 

Therefore, ETH investors can expect a minor pullback into the daily order block at $2,459 or roughly $2,400. A stabilization here could lead to an accumulation from sidelined buyers who missed the initial recovery rally. 

The aforementioned correction would allow the four-hour Relative Strength Index (RSI) to reset around the 50 mean level, suggesting that the bull trend is still intact. The Awesome Oscillator has already flashed a buy signal after it flipped above the 0 mean level, but it could slide below it if ETH retraces. 

A closer look at IntoTheBlock’s In/Out of the Money At Price (IOMAP) indicator shows that the key support level ranges between $2,300 and $2,400. Between this range, 1.4 million addresses bought 50 million ETH at an average price of $2,357.

Therefore, a drop into this range could be met with sidelined buyers accumulating more ETH, resulting in a bounce.

Furthermore, investors can also notice that the underwater investors are relatively small and are unlikely to deter an upswing if the ETH price decides to bounce. In such a case, Ethereum price forecasts that a bounce from $2,300 could result in a retest of the $3,000 psychological level. 

Ether Price Remains Bullish on HTF

Based on Santiment data, the whales holding between have accumulated 550,000 ETH in the past week. This development is extremely bullish and logical, considering the recent approval of spot Ethereum ETF. So, the probability of Ether price continue this rally after a short-term correction is high.

Additionally, the 30-day Market Value to Realized Value (MVRV) is currently hovering around -10% after hitting a low of -21% on August 7. The negative suggests that investors who purchased ETH in the past month are hovering around an average loss of -10%. 

Usually, a dip below -10 % to -30% is considered a buying opportunity, as short-term holders are at a loss and are likely to capitulate, selling their holdings to long-term buyers. 

All in all, the technical and on-chain analysis shows a strong bullish case for Ethereum price. If ETH fails to hold the $2,000 psychological level, it would invalidate the bullish thesis and potentially trigger a correction to $1,900.