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Highlights
- The formation of a double-top pattern raises market concern for a prolonged downfall.
- The ETH price back above 200D EMA sparks early signs of a trend reversal.
- The ETH price back above 200D EMA sparks early signs of a trend reversal.
Since last weekend, the cryptocurrency market has showcased a sluggish trend with most of the major assets wavering sideways. However, the second-largest crypto by market cap Ethereum has maintained a better position amid the development in Spot ETH ETFs. After the recent market correction, the Ether price has established firm support at $2815, providing buyers with an opportunity for a counter-attack. But will the current market dynamic support this rally?
Also Read: Ethereum Price Analysis Warns $2500 Breakdown As Bearish Pattern Emerges
Ethereum Price Forecast: Can ETF Speculation Drive Prices Higher?
The Ethereum price has been under an active correction trend since May end. From the peak of $3974, the altcoin tumbled 29.27% before finding suitable support at $2815. The horizontal level coincides closely with the 23.6% Fibonacci retracement and 50W EMA creates a strong accumulation area for investors.
A bullish upswing this week has uplifted the asset 10.3% to trade at $3116, while the market cap jumped to $373.9 Billion. This recovery likely followed the recent update to the S-1 registration statement by ETF issuers of Ethereum, along with market speculation that this instrument will start trading by mid-July.
However, until final approval is secured, Ethereum may struggle to gain sufficient recovery momentum.
Also Read: Crypto Prices Today July 10: BTC Touches $59K Amid ETF Inflows, ETH Holds Above $3K
Moreover, the Ether coin experienced a significant drop in Open Interest during the early July sell-off. According to data from Coinglass, Ethereum’s Open Interest fell from $14.98 billion to a low of $11.97 billion, marking a 20% decrease.
This substantial reduction in OI suggests a decline in traders’ commitment or market liquidity for ETH, potentially indicating decreased confidence or interest from investors.
If the market supply pressure persists, the ETH price could rechallenge the $2815 support. The horizontal level, which also serves as the neckline of a double top pattern, could intensify selling pressure and potentially lead to a drop toward $2000.
On a contrary note, if the ETF excitement pushes the Ethereum price above $3325 resistance, the sellers will start losing grip over this asset. A potential breakout from the downsloping resistance trendline will signal major market change and bolster crypto buyers to chase $4000.
Technical Indicator
- EMAs: The 50D and 100D Exponential Moving Average wavering around $3325 increases the resistance power for this level
- ADX: The Average Directional Index slope rising to 37% indicates that the downward momentum remains strong, showing no signs of weakening.
Frequently Asked Questions (FAQs)
1. What does Open Interest mean?
2. What is the S-1 registration statement?
3. What is a Double Top Pattern ?
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