Ethereum brushes against range lows, prices to drop further?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Ethereum did not have a clear trend but a retest of the range lows could produce a bounce.
- If Bitcoin sees losses in the coming days, Ethereum could fall toward $1750.
Ethereum [ETH] saw reduced volatility this week after steadily sinking lower on the price charts since mid-July. It was likely that traders were waiting for Bitcoin [BTC] to decide upon a direction. However, BTC itself has a bearish outlook – are ETH traders justified in looking for selling opportunities?
How much are 1,10,100 ETHs worth today?
Ethereum was trading near the lows of its month-long range. Therefore, taking long positions on the token could be a more sensible approach than shorting, as a breakout beneath the range has not yet been seen.
Traders can expect the range to hold until it doesn’t – or is it more complex?
Ethereum has seen large deviations below the range, such as the drop to $1825 on 28 June and 7 July. This showed that brave bulls can wait for such a drop before looking to buy, although their position sizes should reflect the risky trade they would be taking.
ETH also saw a huge rally past $2000 on 14 July, followed by a pullback that was just as quick in wiping out the gains. Since then, prices have been in a bearish slump. Buyers have been weak, as evidenced by the downtrend on the OBV in the past two weeks.
The RSI was also below neutral 50, signaling bearish dominance.
Taking the short-term price action of ETH and BTC into account, it appeared that a dip to the $1825-$1835 offered a scalp trade buying opportunity, targeting mid-range and range-high levels at $1885 and $1935, respectively.
However, a drop below $1800-$1810 would indicate further losses were likely, and bears could wait for a bounce to sell ETH.
The negative slope of the CVD showed seller dominance
On Monday 24 July, Ethereum slid rapidly below the $1870 mark. During that time the Open Interest climbed from $5 billion to $5.2 billion, which showed strong bearish conviction and a swift influx of short sellers.
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In the 48 hours since that drop, Ethereum prices hovered just above the $1845 mark but the Open Interest chart slid lower to show bearish sentiment and discouraged longs. The spot CVD also had a negative slope, showing sellers had the upper hand.
To the south, the H4 imbalance highlighted by the white box at $1750 was a gap that ETH prices could test.