Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The market structure was bearish and a downtrend was in progress.
- The selling pressure remained strong and a reversal was not yet in sight.
A week ago on 7 June, Ethereum prices climbed hopefully toward the $1900 mark. A previous report highlighted the $1890-$1930 as a stiff zone of resistance. Since then, ETH has posted losses on the price charts.
Read Ethereum’s [ETH] Price Prediction 2023-24
The total value of ETH 2.0’s Deposit Contract reached an ATH on 13 June, signaling long-term bullish confidence. Yet the short-term charts exuded bearishness. A drop below the $1700 level appeared likely over the coming days.
The liquidity in the $1780 area could get tested once more
Source: ETH/USDT on TradingView
The 4-hour charts showed a clear series of lower highs and lower lows since 5 June, signaling a downtrend in progress. At the time of writing, the lower high at $1778 was the one to break before the market structure can shift bullish.
Yet, such a move would not be indicative of a shift in the downtrend. Traders must beware of a bull trap in the vicinity of $1800 before another turn downward. The $1700 is a psychological support level. The $1685-$1715 area has been a significant zone since May 2021 and will likely be tested once more.
The RSI on the 4-hour chart was beneath neutral 50 to highlight bearish momentum. The OBV has also been in a downtrend since early June, showing that the bears have been dominant for a while now.
Hence, short sellers can look to enter scalp trades upon a retest of the $1780-$1800 area. A lower timeframe rejection and increased trading volume would suggest that another drop in Ethereum prices was imminent.
The majority of speculators were sidelined but the rest were firmly bearish
Source: Coinalyze
The data from Coinalyze showed that ETH’s Open Interest was relatively flat since 9 June. Previously, the Open Interest was in a downtrend from 5 June. This lack of trend on the OI suggested that a number of participants could be sidelined.
For instance, during the price rally in early May, the OI increased by around $1 billion when ETH climbed from $1815 to $2000.
How much are 1, 10, or 100 ETH worth today?
In the past week the OI remained within a much tighter range. It also showed bearish dominance. On 12 and 13 June, the OI rose alongside falling prices. Although Ethereum did not possess a true downtrend in the past two days, the OI chart emphasized bearish sentiment.