Ethereum Futures Traders Selling Aggressively, How Further Can ETH Price Drop?

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As an experienced analyst, I believe that the recent correction in the Ethereum (ETH) price is a cause for concern, with the cryptocurrency dropping 3.5% to hit $3,550 levels. The surge in daily trading volume to $14.8 billion is noteworthy but could be indicative of increased selling pressure.

As an analyst, I’ve noticed that amidst the recent correction in the cryptocurrency market, Ethereum (ETH) has experienced a significant drop in price, declining by approximately 3.5% and reaching the level of around $3,550. Furthermore, there’s been a substantial surge in daily trading volume for Ethereum, with a remarkable increase of nearly 84% to reach an astounding $14.8 billion.

Ethereum Futures Traders Sell Aggressively

As a crypto investor keeping an eye on Ethereum’s price action, it’s essential to pay attention to the dynamics in the futures market. According to the latest CryptoQuant report, this could provide valuable insights into potential price movements. The chart below illustrates the 7-day moving average of the Taker Buy Sell Ratio, which offers a clear picture of the balance between buyers and sellers. A ratio above one signifies buyer dominance, while a ratio below one suggests aggressive selling is taking place. By closely monitoring this indicator, we can better understand the current market sentiment and potentially adjust our investment strategies accordingly.

Ethereum Futures Traders Selling Aggressively, How Further Can ETH Price Drop?

Based on the chart’s representation, the ratio has fallen short of reaching one and has been experiencing a steep decrease in the past few days. This pattern implies that the majority of Ethereum futures traders have been actively selling off the cryptocurrency, possibly for profit-taking or speculative reasons. The substantial decline in this indicator serves as a bearish sign, suggesting that the current price downturn could potentially extend if this trend continues.

In contrast, Santiment’s Network Realized Profit/Loss (NPL) indicates that some investors are making substantial gains by selling their holdings, while sharp declines could mean others are incurring losses, possibly hinting at widespread sell-offs and a loss of confidence among investors.

The NPL (Net Position Length) indicator for Ethereum experienced a significant surge from approximately $36.69 million on June 10 to over $1 billion on June 11. This upward trend suggests that Ethereum holders are realizing substantial gains, potentially signaling the emergence of local peaks.

Ethereum Futures Traders Selling Aggressively, How Further Can ETH Price Drop?

Uncertainty Surrounding Spot Ether ETF Approval

Experts opine that Ethereum’s bullish surge may be delayed due to the lack of definitive information regarding the timeline for SEC’s approval of S-1 filings. Despite a significant increase in Ethereum investments last week, potential buyers remain uncertain if this trend will persist.

Despite the SEC’s potential approval of applications from BlackRock, Fidelity, VanEck, and other entities this week, some investors express concern that the present market situation may not foster sufficient demand for Ethereum ETFs.

The price of Ethereum has a significant area of support. This region includes the 100-day moving average, which is around $3,430, and the 0.5 Fibonacci retracement level, located approximately at $3,419.

I’m looking forward to observing if Ethereum whales will persist in their buying trend. Meanwhile, economic worries at the macro level are becoming more pronounced.

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2024-06-11 10:31