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Cryptocurrencies: Ethereum Momentum Disappoints: June 12, 2024 Analysis
After a rise of more than 20%, the price of Ethereum is undergoing a bearish correction. Let’s examine the future prospects of ETH together.
Ethereum (ETH) price situation.
After going from $3,000 to $3,800 later approval of spot ETFs on Ethereum, the cryptocurrency’s price stabilized before facing bearish pressure, taking it to $3,500. This decline was fueled by the slight decline in Bitcoin, which dragged the entire cryptocurrency market with it. Currently, the cryptocurrency appears to be stabilizing, demonstrating renewed interest from buyers. As of this writing, one Ether is worth just over $3,500. It is therefore below the $3,800 threshold, which corresponds to the control point observed since the last rebound.
The point of control (POC) refers to the price level with the highest trading volume in a given period, indicating a key support or resistance zone.
The next value area to consider is just below the Ethereum price level, especially below the $3,000 mark. This zone coincides with the support zone identified at the same price level.
Ethereum remains above its 50-day and 200-day moving averages, continuing to support the idea that the cryptocurrency is in an uptrend. However, it should be noted that Ethereum’s momentum is being revised downwards, as evidenced by oscillators and the price of Ethereum itself.
The current technical analysis was conducted in collaboration with Elie FT, a passionate investor and trader in the cryptocurrency market. Today he is a coach at Family businessa community of thousands of independent traders active since 2017. You will find lives, educational content and mutual support on the financial markets in a professional and friendly atmosphere.
A Closer Look at Derivatives (ETHUSDT)
The open interest of Ethereum-linked perpetual contracts has recently followed the course of its underlying asset. Together with a still positive funding rate, this demonstrates a majority participation by buyers in Ethereum derivatives. However, it should be noted that, while positive, these rates have been revised slightly lower, reflecting a slight capitulation by buyers. This phenomenon could be explained by the increase in selling pressure, but also by particularly strong liquidations on the part of buyers.
The ETH/USDT three-month liquidation heatmap reveals that the $3,700 liquidation zone was recently reached. It appears to have triggered buying interest that was not sustained, allowing the bearish movement to continue. Currently, the most significant liquidation zones are located on either side of the current price. Above, we can see the $3,900 zone. Below, we can see the $3,000 zone. The price approaching these levels could trigger a massive number of orders, thus increasing the risk of a period of high volatility for Ethereum. These areas therefore represent a crucial point of interest for investors.
Ethereum (ETH) price hypothesis.
- If Ethereum price remains above $3,300, we could anticipate a bullish recovery to $3,900 or even $4,000. The next resistance to consider would therefore be $4,100. If the upward movement continues, it could mark a new high at $4,500 and even reach Ethereum’s ATH, just below $4,900. At this stage, that would represent an increase of more than 37%.
- If the price of Ethereum fails to remain above $3,300, we could expect a return to around $3,000. The next support to consider, if the bearish movement continues, would be in a price range between $2,800 and $2,700. At this stage it would represent a decline of approximately -13%.
Conclusion
After an initial surge followed by a stabilization, the price of Ethereum faced downward pressure, partly due to the decline in the overall cryptocurrency market. Currently, the cryptocurrency is showing signs of stabilization with renewed interest from buyers. While these fluctuations cast doubt on Ethereum’s future direction, its underlying trend remains bullish, favoring the idea of a potential rebound. However, it will be crucial to closely monitor the price reaction at different key levels to confirm or invalidate current assumptions. It is also important to remain vigilant against potential “fake outs” and market squeezes in every scenario. Finally, let us remember that these analyzes are based exclusively on technical criteria and that cryptocurrency prices can also evolve rapidly based on other more fundamental factors.
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