Ethereum’s price is yet to recover from the drop it has been experiencing lately. Therefore, more downside could be expected in the coming weeks.
Technical Analysis
By Edris Derakhshi (TradingRage)
The Daily Chart
On the daily chart, the price has been making lower highs and lows since getting rejected from the resistance at $4,000. Several support levels have been lost in the last few months, especially the 200-day moving average, located around the $3,000 mark.
While the price has already dropped to the $2,200 support and rebounded, there is still the chance for the market to decline lower as long as the cryptocurrency remains below the 200-day moving average.
The 4-Hour Chart
Looking at the 4-hour timeframe, the price has gradually declined inside a large falling wedge pattern. While the market broke the pattern to the downside on Monday, it recovered, reclaiming the $2,800 level. Yet, the RSI still shows values below 50%, indicating that the momentum is still bearish.
Therefore, if the price does not break back above the $3,000 level soon, a deeper correction or a longer consolidation could be expected in the coming weeks.
Sentiment Analysis
By Edris Derakhshi (TradingRage)
Ethereum Open Interest
As Ethereum’s price is in a steep downtrend, market participants wonder where the price will finally find support. Analyzing the futures market sentiment could provide helpful insights into this situation.
This chart presents the Ethereum funding rates metric, which measures whether the buyers or the sellers are executing their orders aggressively (using market orders) on aggregate. Favourable funding rates indicate bullish sentiment, while negative values show bearish sentiment.
As the chart suggests, the funding rates have dropped significantly following the recent crash. Judging by its current values, it is safe to say that the futures market is no longer overheated. However, without sufficient demand in the spot market, the market will not be able to recover any time soon.
The post Ethereum Price Analysis: ETH Plunges 10% Weekly, What’s the Next Target? appeared first on CryptoPotato.
