Ethereum could climb to $1900, but here’s why that might not be bullish
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Ethereum could collect liquidity under $1900 before a bearish reversal
- Traders can keep an eye on the range extremes and flip bullish only if the high turned into a support zone
Ethereum [ETH] traded within a range over the past two weeks. The on-chain metrics showed investors HODLing and staking ETH, which was a bullish sign for long-term buyers. And yet, in the short term, the volatility and trading volume have taken a hit.
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This finding suggested that conditions were not ideal for traders, although they can still profit from price movements. The short-term range could offer a trading opportunity for both bulls and bears.
Recent rejection from $1870 highlighted bearish intentOn 8 August, ETH broke the previously bearish market structure but was unable to climb past the $1870 resistance zone. The $1875 resistance level from 1 August was a local high, one that the bulls were unable to beat on the recent rally.
This signalled bears had strength. Yet, it also showed that many short positions could have set their stop-loss order in the $1880 region. More conservative orders could also be set above the range highs at $1890.
Therefore, an ETH move to these areas in search of liquidity has a high probability. Such a move would also convince people that the sentiment is firmly bullish, collecting even more liquidity from buyers. A reversal afterwards could be sudden, and panicked sellers would accelerate the fall in prices.
This is one possible scenario. The OBV highlighted a lack of buying pressure over the past week. The RSI noted neutral momentum as the price stalled around the mid-range mark.
Spot CVD presented evidence for a hike in demand for EthereumBased on the price action of the past week, the market structure seemed bearish. Open Interest also highlighted bearish sentiment as bullish speculators continued to straddle the fence. To contrast this, the spot CVD formed a low on 11 August and has climbed slightly higher since.
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Therefore, it is possible that a move higher has been brewing. Whether it will hit the range highs and then fall lower remains to be seen. The lack of an uptrend on the OBV suggested that ETH was not in a short-term accumulation phase recently.
Hence, a push above $1890 might not materialize soon.