As a seasoned researcher with over a decade of experience in the cryptocurrency market, I have seen my fair share of bull and bear runs. This recent drop in Ethereum price has caught my attention, as it seems to be a complex interplay of various factors.
On Tuesday, a strong wind of turbulence affected the Ethereum price and other cryptocurrencies in the market, causing a 3.3% decrease in prices over a 24-hour period. This dip occurred amidst an overall market capitalization of approximately $2.27 trillion. The largest crypto, Bitcoin, also took a hit, falling below $62,000, despite Nasdaq’s application with the SEC for permission to offer Bitcoin index options.
Ethereum Price Market Movers: Strong Derivatives, Slowing Network Growth, Ether ETFs Persistent Drop
- Ethereum price exchanged at $2,571 during US business hours amid calls for an immediate reversal toward $3,000. Derivatives analysis reveals strong fundamentals behind ETH price, starting with Coinglass data on open interest.
A subsequent uptrend in the futures volume to $26.46 billion adds credence to the bullish outlook unfazed by the rapid price drop. According to crypto analysts and trader Adam, the uptick in OI and the funding rate drop indicates perps shorting and directional positioning. At the same time, the CVD divergence amid the downtrend signals an influx of market sell orders. All these factors considered, Ethereum price could be gearing up for a robust short-squeeze, leading to a major run to $3,000.
ETH is setting up for one of the cleanest short-squeeze trades I have seen in a while.
When the level is reached or signs of reversal become evident, be sure to invest in Solana or any other asset that tends to rise.
— adam (@abetrade) August 27, 2024
- However, the number of new Ethereum users has dropped to 68.2k addresses matching levels last seen in November 2023, according to Santiment. This is particularly concerning considering a spike to approximately 197k new addresses in May 2024. A persistent decline in this metric means that demand for Ethereum is reducing and, in the process, depriving ETH price of the momentum to sustain an uptrend.
- Ethereum ETFs posted another net outflow on Monday, summing to $13,23 million. Per SoSoValue data, the products allowing investors to seek exposure to ETH on stock exchanges have since August 15 recorded net outflows signaling negative sentiment and the lack of confidence in the market.
ETH Price Analysis: Can Bulls Come Out On Top?
It appears that Ethereum price bulls are finding it difficult to maintain their position in the short term, given the development of a bear flag pattern within the daily range. If this trend continues, potential obstacles for Ethereum could arise around the 20-day Exponential Moving Average (EMA) at approximately $2,700, the $50-day EMA at roughly $2,890, and the 200-day EMA at about $3,021.
The Relative Strength Index (RSI), currently in the neutral zone moving towards the oversold region, suggests that sellers have a strong control over Ethereum’s price. If a 17% drop from the current market value is expected, this would be indicative of the ETH flag pattern being validated, as Ethereum breaks through the channel’s support line. In such a scenario, Ethereum might revisit the $2,100 support level that was observed in early August.
Nevertheless, Ethereum price forecast suggests that short-term support at $2,500 and the channel’s support could immediately annihilate the continued correction chances. An increase in short positions could also create a perfect squeeze, guiding Ether price to $3,000 and higher.
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2024-08-27 21:02