ETH bulls suffer a setback after reaching $1750, can they recover?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Ethereum had a strong bullish performance toward the end of September
- The recent losses meant a move toward $1500 could be next, though on-chain metrics opposed this idea
Ethereum [ETH] rallied 12% within a week as the bulls forced a move higher from $1597 to $1751. Like Bitcoin [BTC], ETH also suffered under bearish pressure that surged on 2 October, driving prices down.
Read Ethereum’s [ETH] Price Prediction 2023-24
A price report of Ethereum by AMBCrypto from 2 October, written hours before the harsh rejection, observed that the 12-hour chart was flipped bullishly at that time. While the article highlighted volume indicators supported the idea of further gains toward $1900, it also noted that the trading volume and Open Interest had begun to turn, suggesting bearish sentiment could be taking root.
Has Ethereum formed a month-long range?
The daily chart of Ethereum showed that even though the $1660 level was important for the bulls to seize, the battle was not won there. The bearish breaker block on the one-day chart from 14 June (red box) was still unbeaten.
Moreover, the price formed a range (orange) that extended from $1745 to $1531, with the mid-point at $1640. The mid-range level served as support for the majority of September, reinforcing the credibility of the range. Therefore, the fall below $1640 in the hours before press time signaled that a drop to $1530-$1550 could be imminent.
The brief rally saw the Relative Strength Index (RSI) shoot higher to 68 on 1 October but has receded to 45 since then. This suggested the bullish momentum had waned. Additionally, the On-Balance Volume (OBV) has been in a clear downtrend since July. Hence, until this trend shifts, a bullish breakout past $1700-$1750 would remain unlikely.
An increase in active addresses was a positive that ETH bulls would cherish
The Market Value to Realized Value (MVRV) ratio climbed into positive territory for a fleeting moment on 1 October but quickly fell lower as holders chose to take profits. The dormant circulation didn’t see noticeable spikes since 12 September- hence, significant waves of selling from long-term holders likely hadn’t occurred.
How much are 1, 10, or 100 ETH worth today?
The mean coin age has also been on the rise during this time, reinforcing the idea derived from the dormant circulation metric. The uptick in active addresses in mid-September was also a positive development for Ethereum.